NEW DELHI, 5 June 2005 — Indian Petroleum Minister Mani Shankar Aiyar, who arrived in Lahore by crossing the Wagah border, was hopeful that his current trip would bring about a historic change in Indo-Pak relations.

The minister made this statement while embarking a four-day visit to Pakistan. “My discussions with Pakistan will mark the commencement of a historic change in Indo-Pak relations.”

During his stay, Aiyar and his Pakistani counterpart Amanullah Khan Jadoon will be holding formal talks for the first time on the much publicized Iran-Pakistan-India gas pipeline project.

Though India was reluctant initially to hold talks on the issue, it now seems to looking for an agreement with Pakistan. Aiyar was also expected to discuss the possibility of opening another corridor for Central Asian energy supplies through Pakistan.

He was also to explore the prospects of selling Indian diesel to Pakistan, and discuss investment and trade opportunities in the oil and gas sector, officials said.

The energy demands of India, the world’s second-most populous nation, are high and growing. India produces only about half the natural gas it uses. Its crude oil imports are as high as 70 percent.

In February, India and Iran held extensive talks on the gas pipeline project, during the visit to New Delhi of Iranian Foreign Minister Kamal Kharrazi.

The 2,700-kilometer pipeline project is valued at $4.5 billion. Iran has 27.5 trillion cubic meters of gas reserves, while India currently requires 90 million cubic meters a day and this is projected to increase by more than four times over the next two decades.

Just ahead of his visit, an official source said: “The engagement is basically political. We have already had three rounds of talks with the Iranians, with considerable progress. But as the pipeline project is a tri-nation project, we need to engage with the third party (Pakistan).”

Aiyar will be holding discussions with Pakistan regarding the implications arising out of the proposed project. He has not ruled out the possibility of a tripartite agreement, if the project moves in the right direction.

Behind the scenes, several developments have taken place to actually implement this project. One of these is India’s concern about the security of the project.

The Iranian side at the meeting of the task force on the Iran-Pakistan-India pipeline in Tehran in May suggested that the Pakistani armed forces be handed the contract for the security of the pipeline transiting through Pakistan for an annual fee of $100 million.

Of late, Islamabad has agreed to guarantee security for the proposed project and has also favored extending another pipeline to India.

While in Pakistan, Aiyar is expected to take up transit issues like the route of the pipeline, transit fee and security of the pipeline.

Before leaving for Pakistan, Aiyar said that his talks with Pakistani leaders should not be expected to be “conclusive,” hinting that these would probably set the stage for talks to be held in Tehran later this month.

Iran’s Deputy Oil Minister for International Affairs Mohammed Hadi Nejad-Hosseinian said in Tehran last month: “On Indian petroleum minister’s visit to Tehran in June 2005, we plan to invite Pakistani petroleum minister to hold trilateral talks in Tehran.” He added that the “Indian minister has not opposed presence of Pakistan minister in tripartite talks.”

The issue of removing diesel from the negative list of importable items from India would be taken up in Aiyar’s meeting with Pakistan’s Commerce Minister Humayun Akhtar. The minister is also expected to explore the possibility of cooperation in oil and gas, including investment and trade opportunities.

The Indian Cabinet has announced that India would hold talks with Iran, Pakistan, Afghanistan, Bangladesh, Turkmenistan and Myanmar (Burma) in February on three gas pipeline projects in order to ease India’s heavy dependence on imports.

From Islamabad, Aiyar will visit Azerbaijan, Iran and Qatar on the second leg of his tour during he will explore and discuss bilateral issues in the hydrocarbon sector.