Though talks on a massive, multi-billion dollar 3,000-kilometer pipeline venture involving Iran, Pakistan and India began in the early 1990s, it did not attain any substantial progress due to existing animosity between two receiving parties: India and Pakistan.

Since the revival of negotiations in February 2004 for the IPI pipeline, also known as "Peace Pipeline," progress has been ambitiously inching forward with all three countries currently hammering out contentious issues like gas prices, transportation tariffs, pipeline security and the latest snag, Iran's right to review the gas price.

Originating from Iran's southern port city of Asalouyeh and traversing through the rugged and restive provinces of Balochistan and Sind in Pakistan, the US$7 billion (a re-estimated project cost) pipeline would see its final destination in New Delhi and Mumbai in India.

The pipeline project aims to deliver natural gas from Iran to its energy starved eastern neighbors. However, the high price tag attached to the massive project has caused more than a few roadblocks. During talks in July 2006, negotiations stalled when Tehran demanded a higher price per mBtu (Million British Thermal Units) against what New Delhi and Islamabad had to offer.

Even after India and Pakistan agreed to pay US$4.93 per mBtu this February, Iran insisted that the countries should understand "market realities" when dealing with such a long-term project, arguing that prices should be reviewed every three years.

As per the proposed contract, 30 million metric standard cubic meters of gas per day would be available to India and Pakistan in the first phase of the project.

Iranian officials argued that the price revision clause was merely a "mechanism to study the market realities," which would help to maintain the "sanctity" of the contract.

But the underlying meaning was that Iran wanted India to maintain the "sanctity" of bilateral relations with Iran in world forums like the UN's International Atomic Agency (IAEA), as well as with the EU and the US.

Beyond the economic prospects, Iran is using the pipeline deal to gain political support on the international arena US allies India and Pakistan. As such, the three-year price revision clause is imperative for Tehran to check bilateral ties in the face of hostile international diplomacy.

The US government opposed the Iran-Pakistan-India pipeline, though it recognizes the growing energy needs of the south Asian countries involved in the project. Washington has continued to exert pressure on both India and Pakistan to shelf the project, using both carrots and sticks to get its message through.

Washington fears that Iran's perceived nuclear weapons ambitions and links to international terrorism would gain material and moral strength if the project materialized. However, both India and Pakistan are determined to go ahead with IPI initiative.

Iran likes to flaunts its "second largest gas reserves in the world" status frequently, while offering reassurances that revenues from this project would be utilized for the "general economic development" of the country, not for building nuclear weapons or sponsoring terrorism.

Another issue that could jeopardize the project is the physical security of the pipelines, especially in the volatile regions of Pakistan. A January 2005 incident in which Baloch rebels launched a series of attacks on the Sui gas field, disrupting fuel supplies in Pakistan, still has India worried.

Though Pakistan has agreed to post a heavy guard on the portion of the pipeline that runs through its territory, India is holding out for a commitment that transcends politics and paperwork. India is seeking a strong moral and ethical commitment from both Iran and Pakistan should relations turn sour and endanger the project midway.

Hurdles and pressures notwithstanding, it seems that all three nations are interested in moving forward with the IPI for its clear economic, political and strategic benefits.

Despite the remaining unresolved issues, one positive conclusion can be drawn from Iran's Petroleum Ministry representative Ghanimi Fard, who expressed strong optimism on the sidelines of a Delhi meeting in late June. Fard indicated that Iran would start sending natural gas from its South Pars gas field by 2011 at the latest.

For now, all eyes are on the forthcoming ministerial level meeting, which will possibly obliterate the remaining hurdles, including the periodic price revision clause, before the three heads of state sign off on the pipeline dream.