Iran’s leader to visit India to deepen energy ties

Energy issues will top the agenda during the visit, a government official said. Nuclear-armed India, hungry to tap new sources of energy to fuel its booming economy, is looking to Iran as a long-term energy partner.

New Delhi is hoping to kickstart stalled negotiations over a multi-billion dollar deal to pipe natural gas to India from Iran via Pakistan. New Delhi also wants to revive a 2005 agreement to import 5 millions of tonnes of liquefied natural gas from Iran.

Washington has opposed the pipeline, which its fears will fund Iran’s nuclear ambitions. Washington urged India this week to use Ahmadinejad’s visit to encourage Iran to stop nuclear enrichment.

India responded late on Tuesday by saying that it did not need “any guidance” on conducting its bilateral relations.

“Both nations are perfectly capable of managing all aspects of their relationship with the appropriate degree of care and attention,” the Ministry of External Affairs said in a statement.

India will also hope to improve diplomatic relations with Tehran after it voted against Iran at the International Atomic Energy Agency in 2006, as well as its launch of an Israeli spy satellite earlier in 2008.

Damage Control

“India is now eager to repair the damage and is looking at its long-term strategic interest by playing their Iran card, like on energy issues,” said Brahma Chellaney at the Centre for Policy Research.

India has been boycotting trilateral meetings on the Iran pipeline since mid-2007, citing it first wanted to resolve the issues of transit fees and transportation tariffs with Pakistan.

The proposed pipeline would initially carry 60 million cubic metres (2.2 billion cubic feet) of gas daily to Pakistan and India, half for each country. The capacity would be raised to 150 million cubic metres at a later date.

India’s Petroleum Minister Murli Deora is also visiting Pakistan this week to talk about the pipeline, the first formal contact between the two countries since a new coalition government took office in Islamabad in March, according to state-run media.

There have been no indications India will discuss nuclear technology with the Iranian president.

In the early 1990s, India was reported to have offered some help on building a civilian research reactor in Iran under international safeguards but backed down after U.S. pressure. There have been no reported offers of assistance since, Chellaney said.

India has invested in civilian nuclear reactors to help fulfil its increasing power demand and plans to nearly double capacity by 2011. India conducted a nuclear weapons test in 1998, leading then to sanctions from the United States.

Under discussion will be the role of Indian companies in the development of Iran’s energy sector amid U.S. pressure not to invest in the country.

In 2007, India’s privately run firm Essar backed down from setting up a refinery in Iran that would have violated U.S. sanctions.

Oil and Natural Gas Corp (ONGC), India’s top explorer, has been in talks to develop oil and gas fields in Iran.

Iran has the world’s second-largest reserves of oil and gas, and sees companies in India as less susceptible than many others to Western pressure over Tehran’s nuclear programme.