Pakistani Prime Minister Shaukat Aziz yesterday said that India had now agreed to join the venture unconditionally, although further consultations would be necessary to settle any outstanding matters.

Analysts have said the planned pipeline, which could be completed by 2011, would help improve relations between the nuclear-armed neighbours that have fought three wars since their independence from Britain in 1947.

Aziz said Pakistan, which hopes to earn million of dollars in transportation fees from the project, had guaranteed India safe transportation of gas, allaying India’s concerns regarding pipeline security and unhindered supplies.

India had previously said it would only agree to the pipeline being built if economic ties with Pakistan improved and that Pakistan allowed India transit rights for movement of goods to central Asia, and lifted a ban on imports of Indian goods such as diesel.

Aziz said Pakistan was also considering pipeline projects to bring gas supplies from Turkmenistan and Qatar, but that it was too early to say which of the projects would proceed first.

Meanwhile, Business India quotes Petroleum Minister Mani Shankar Aiyar as saying the government-owned gas major GAIL (India) Ltd might be allowed to go ahead with its proposed plans for a 7900km national gas grid despite no clear policy guidelines on gas transportation and possible foreign investment.

Aivar told a Confederation of Indian Industry (CII) meeting this week that his government was considering allowing GAIL to move ahead with plans for a national gas grid, in anticipation of future supplies, including imported natural gas and LNG.

Formerly the government had been restricting GAIL from laying pipeline infrastructure until it had secured supplies and marketing arrangements.

GAIL estimates laying 7900km of high-pressure pipelines across 15 states would cost about US$457 million. It already has a 2799km network of regional pipelines.

Aivar assured overseas CII delegates, including those from Chevron Texaco, Houston-based Eastern Ventures and Singapore-based Petroglobal, that steps were being taken to put in place new gas regulatory, pricing and gas transportation policies.