Iran state-owned National Iranian Gas Export Company (NIGEC) is holding discussions with India-based South Asia Gas Enterprise (SAGE) to build a $4.5bn undersea gas pipeline from Iran to the Indian state of Gujarat.

The proposed 1,400km Iran-India subsea pipeline will have the capacity to a carry approximately 31 million cubic meters of gas a day through the Oman Sea and Arabian Sea.

Once the policy, financing and purchase tie-ups are in place, it will take two years to complete the pipeline construction.

"Our negotiations have been under serious considerations for some time and we hope to soon finalise an agreement."

Business Standard quoted NIGEC managing director Alireza Kameli saying: "Our negotiations have been under serious considerations for some time and we hope to soon finalise an agreement for the SAGE pipeline project."

The proposed pipeline, the Middle-East to India Deepwater Pipeline (MEIDP) project, is expected to bypass Pakistan’s exclusive economic zone and transport gas from Chabahar in Iran and Ra’s al Jifan in Oman, to Porbandar in Gujarat.

Later on, it may be possibly extended to Mumbai.

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MEIDP will connect the Gas Rich Gulf and Middle East regions to India to transport natural gas, and thus secure the energy needs of India.

SAGE director Jain said that state-owned companies such as the Gas Authority of India (GAIL) and the Indian Oil Corporation (IOC) can use the gas infrastructure.

The company is promoted by Siddho Mal Group, in a joint-venture with a UK-based Deepwater Technology Company.