India has not been influenced by US pressure to abandon the Iran-Pakistan-India gas pipeline project, Iranian Deputy Oil Minister Mohammad-Hadi Nejad-Hosseinian has said.

The US has been exercising pressure on this front, "but India has not been coerced by the pressure", Nejad-Hosseinian was quoted by Mehr news agency as saying Monday.

Construction of the $7.4 billion Iran-Pakistan-India gas pipeline is slated to begin in 2007. The three countries are currently engaged in discussions to work out the modalities of the project.

Nejad-Hosseinian conceded it was possible that the project currently under way by the National Iranian Oil Company could be stopped under US political pressure. "The fate of the current oil ministry projects is not determined."

The minister maintained that the increase in the cost of the project was due to a rise in the prices of steel, pipes and other material and equipment to be used.

He stated that under the contract, Iran and India could mutually endorse the LNG contract null and void and claim compensations of $50 million a year if either side breached its commitments.

Nejad-Hosseinian said under the agreement, Iran would have to offer the project to the contractor by Sep 2006 and India would have to construct a platform for LNG delivery and order LNG carriers; otherwise it would amount to violation of the contract.

He said if Iran failed to deliver gas to India by 2009 or if New Delhi was not ready to receive the gas by that time, both would be subject to payment of penalty.

After two years of negotiations, Iran and India signed an LNG contract in June 2005 under which Tehran will supply New Delhi with five million tonnes of LNG a year for a 25-year period. The contract is to go into effect by late 2009.