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Cablegate: Foreign Minister Tells Parliament No U.S. Pressure On Gas

VZCZCXRO1780
OO RUEHDIR
DE RUEHNE #5137 3340113
ZNR UUUUU ZZH
O 300113Z NOV 07
FM AMEMBASSY NEW DELHI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9490
INFO RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCNIRA/IRAN COLLECTIVE

UNCLAS NEW DELHI 005137

SIPDIS

SENSITIVE

SIPDIS

DEPARTMENT FOR EEB JAMES EIGHMIE
DEPARTMENT FOR SCA/INS and P.

E.O. 12958: N/A
TAGS: ENRG PREL EPET EINV PGOV IN IR
SUBJECT: FOREIGN MINISTER TELLS PARLIAMENT NO U.S. PRESSURE ON GAS
PIPELINE WITH IRAN


1. (SBU) Media reported on November 28, 2007 that India's
Minister of External Affairs, Pranab Murkherjee, had
sent to the Lok Sabha a written reply to a question
in which he denies that the U.S. has asked India not
to move forward with the proposed Iran-Pakistan-India (IPI) natural
gas pipeline. EMBASSY COMMENT. This written assertion is factually
incorrect. Over the past two years, Ambassador Mulford has conveyed
US opposition to the IPI pipeline repeatedly to the Petroleum
Minister and other senior MEA and GOI officials; and USG officials
and other Embassy officer have made similar demarches. END COMMENT

2. (SBU) According to the press report, Minister Mukherjee
"informed the House that the Ministry of Petroleum
and Natural Gas (MPNG) has been negotiating the
pipeline project with Pakistan and Iran. The Sixth meeting
of the tripartite Joint Working Group was held in
Delhi on 28-29 June 2007. Three meetings of the
India-Pakistan Joint Working Group and five meetings of the
India-Iran Special Joint Working Group have been held so far.
Several key issues including price formula, transit fee and
transportation tariff are under discussion." The article also noted
that with Pakistan now in a state of emergency, the GOI has
indicated that it is waiting for the political climate to cool down
before initiating talks on the transit fees.

3. (SBU) In a separate, related development the same day, Congress
MP Jyotiraditya Scindia, defending the US-India civilian nuclear
energy cooperation initiative in the face of withering attacks
during Parliamentary debate by the BJP and Left about the deal's
supposed erosion of Indian sovereignty, mentioned on-going
negotiations on the IPI as one of several signs of continued Indian
sovereignty and independence in foreign policy formulation.

4. (SBU) COMMENT: Post sees Mukherjee's statement as factually
correct but prudently evasive as a response to a parliamentary
question, in that: the statement avoids mentioning the GOI's and
MPNG's continued skepticism toward the IPI negotiations and towards
Iran's reliability as a commercial partner for long-term energy
projects; and it is consistent with official statements designed to
placate public opinion with assurances that the problematic
negotiations are continuing. As previously reported India's main
negotiator for the IPI, MPNG Secretary Srinivasan, did not attend
the last two scheduled meetings with Iran.

5. (SBU) COMMENT CONTINUED. Moreover, the topics cited as "under
discussion" have remained over the last two years as central
stumbling blocks for India's potential agreement to a final deal.
Post's past reporting has underscored India's frustration with
Iran's shifting position on pricing and its two-thirds reduction in
the proposed volume of natural gas deliveries via the IPI as well as
with Iran's reneging on its other LNG and petroleum exploration
agreements with India. Post continues with its long-standing
assessment that GOI statements, including this
latest from Mukherjee, are designed mainly to assuage
public opinion among leftist and Muslim voters who support close
ties with Iran, and that the GOI and MPNG remain skeptical of Iran's
reliability as a commercial energy partner.

6. (SBU) COMMENT CONTINUED: The main benefit to the UPA and the
Congress leadership from the IPI, it seems, is the ability to say,
as Scindia did, that the talks - however glacial - preserve India's
cherished independence and national sovereignty over foreign policy.
Despite sixty years of independence, many here remain paranoid
about the evil designs of "imperialist" powers. The pipeline talks
play well with the large Muslim vote block and with the many
socialists and left-leaning members of India's elites. In their
view, even if not even one drop of oil comes out of the whole
pipeline process, the very act of "defying" the U.S. is laudable in
and of itself. The UPA, recognizing the need to choose its fights
carefully, bends to these opinions so it can eak out a much-hoped
for victory on an agreement of far greater importance to it: the
nuclear deal with the U.S.
MULFORD

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