Russia keen to build Iran pipeline

New Delhi, Nov 25 | Updated: Nov 26 2005, 07:03am hrs
Russian minister of industry and energy V Kristenko said on Friday that his countrys gas firm, Gazprom, was keen to help construct the estimated $7 billion Iran-Pakistan-India (IPI) gas pipeline project.

"Its a commercially viable project. It is a pipeline of peace and will help to remove political risk. Russia and Gazprom would be prepared to share risks along the route of the pipeline and we do hope other stakeholders would also be benign towards sharing risks with Russia," Mr Kristenko told the media on the sidelines of the second Asian energy round table being hosted by India with the participation of central and north Asian countries and major Asian oil and gas consumers.

Stating that Russia has experience in building several transnational pipelines including undersea pipelines spread over 1,000 km, he urged India and Pakistan to utilise his countrys expertise.

The Russian minister also said that Indian firms could bid for the planned initial public offering (IPO) of Russian oil firm Rosneft. "At this stage, we are preparing an IPO of Rosneft. Let Indian companies participate in acquiring the assets through the IPO," he said.

The Russian government fully owns Rosneft and has over 50% stake in Gazprom. Russia is planning to sell Rosneft stocks next year after consolidation of its assets to repay $7.5 billion the company had borrowed to buy stake in Gazprom. Roseneft had paid $9.4 billion to acquire Baikal Finance Group, which won a December 2004 auction for Yuganskneft.

"We would like to partner Indian companies to acquire assets in Russia through the IPO in Roseneft. Another way could be like Sakahlin-I (in which ONGC holds 20% stake) to acquire stake in other exploration projects that come up," Mr Kristenko said.

Regarding India bringing its share of Sakhalin-1 crude home, he said there could be a test case to study the feasibility. He, however, favoured using Russias eastern Siberian pipeline project to bring oil to India.

In the case of gas produced in Sakhalin-I, the minister did not favour the idea of bringing it to India. "We have had discussions with Indian petroleum minister Mani Shankar Aiyar and this is certainly an issue that needs precise commercial evaluation. Direct logistics of gas supply from Sakhalin suggest India is not a feasible destination, so it would be better to swap shipment to Japan," he said.