Pakistan and India have principally agreed to resolve the fundamental issues of the Iran-Pakistan-India gas pipeline project and have committed to start construction work next year.

This was stated by the Minister for Petroleum and Natural Resources, Khawaja Muhammad Asif and his Indian counterpart Murli Deora at a joint news conference after holding lengthy talks on the IPI project in Islamabad Friday.

Khawaja Muhammad Asif said that three basic issues including structure of the pipeline company (which will execute and manage the project), transportation tariff and transit fee have been discussed.

Consensus emerged on the principles on which the bilateral agreement will be concluded.

Both the ministers agreed to consult with their respective governments for an early conclusion of the agreement on these issues.

The project, named the "Peace Pipeline," will be completed in September 2012 at a total cost of US$7.5 billion. Pakistan will contribute US$3 billion.

The ministers acknowledged the project is of immense economic and strategic value for both countries, will add a new dimension to their bilateral relationship, and go a long way in improving the quality of life of the people of both countries.

Khawaja Asif said that with the completion of this project a new era of economic and development will usher in the region.

He said the pipeline would not only meet the need of the energy, but will also strengthen the ties between the two neighborly countries and add new dimension to Indo-Pak relationship.

The Indian Petroleum Minister Murli Deora said he held very fruitful discussions with his Pakistani counterpart in a positive spirit.

He said we have reached to the agreement principally and hoped that we can go ahead with the project.

(C) 2008 Asia Pulse Pte Ltd.