Iran, Pakistan and India plan to start laying a $7 billion gas pipeline by September 2009.

According to Pakistan's Dawn newspaper, each country will build sections of the gas pipeline along its own territory. Iran has reportedly begun laying its 1,100 kilometer section of the pipeline to serve its eastern areas.

A tentative schedule for the development of the entire pipeline has been agreed to, and planners expect completion of the project in late 2014.

Under the agreement, Pakistan would build a $2.64 billion, 655 kilometer gas pipeline along its territory through the private sector on a 'build, own, operate and transfer' basis. A lead sponsor would be appointed soon after signing a gas sales and purchase agreement with the National Iranian Gas Company by June 2007.

The Iranian segment of the pipeline will cost $3.99 billion. The 344 kilometer Indian section will cost significantly less, at $600 million, according to the report.

The construction of the Pakistan portion of the gas pipeline is expected to start in September 2009 and be completed by September 2011. The first flow of gas is expected in June 2014.

India has been under U.S. pressure to withdraw from plans for the pipeline, but Iran and Pakistan have repeatedly confirmed they will go ahead with the groundbreaking project.

The three countries have reportedly reached an initial consensus on the price of the gas which Iran would export to the two energy-hungry countries via the pipeline.

Iran has the world's second-largest gas reserves after Russia.

HRE/MR/BG