Any overland line to Iran will have to transit Pakistan

Three pipeline projects will be discussed with Afghanistan, Bangladesh, Burma, Iran, Pakistan and Turkmenistan, the cabinet announced on Wednesday.

"It will significantly enhance the oil security of the country," Oil Minister Mani Shankar Aiyar told reporters.

India's energy demands, both in oil and gas, are expected to double by 2020 as the country's economy grows rapidly.

Natural gas is the most economic, efficient and environment-friendly fuel Indian government statement Ambitions in the pipeline

The world's second most populous country produces only half the natural gas it uses and currently imports 70% of the crude oil it needs.

Record oil prices in recent months have hit India hard as a result.

All the countries have agreed to the projects in principle.

Observers in Delhi say negotiations are expected to be delicate, particularly with arch-rival Pakistan, but the mood in India is cautiously optimistic.

If the projects materialise, they would be seen as a diplomatic and economic coup for all concerned.

'Pipeline diplomacy'

The Indian government says natural gas imports will be needed if expected economic growth of 7-8% is to be sustained.

India imports more than 70% of its oil

"It is imperative to look for cost-effective and long-term arrangements to meet our energy requirements," the government said in a statement.

"Natural gas is the most economic, efficient and environment-friendly fuel."

The BBC's Ethirajan Anbarasan says India's "pipeline diplomacy" could bring about a major shift in the oil economy of Asia.

Mr Aiyar said three pipelines are under consideration - from Iran through Pakistan, from Turkmenistan through Pakistan and Afghanistan, and from Burma through Bangladesh.

Pakistan, Bangladesh and Afghanistan stand to reap millions of dollars in transit fees.

Accords

Pakistan has been keen on the $4bn Iran pipeline project for years, but negotiations have made little headway because of political tensions with India.

Delhi and Dhaka also have their differences, but our correspondent says economic needs combined with pragmatism seem to have changed minds in both capitals.

Last month, the Burmese, Indian and Bangladeshi governments agreed in principle to develop natural gas fields off the coast of Burma.

A pipeline through Bangladesh would also be built.