In a significant statement after his meeting with Indian Petroleum Minister Mani Shankar Aiyar, who is here for the first ministerial level talks on the proposed pipeline, Pakistan Prime Minister Shaukar Aziz said Monday, "The pipeline is a stand alone and independent project which should not be linked to any other issue."

Both the countries have agreed to set up a joint working group to discuss and iron out various issues, including its structure, route, financing and tariff by yearend and get the project off the ground in the new year.

A formal communiqué is to be issued on this regard after Aiyar's meeting with President Pervez Musharraf.

India is hopeful of a similar breakthrough in the proposal submitted by the state-owned Indian Oil Corporation (IndianOil) to Pakistan that it would be willing to supply 325,000 tonnes of diesel between October-March at competitive prices, compared to the concessional prices at which Islamabad is currently importing from Kuwait.

Aiyar raised the issue of diesel imports and possibly petrochemicals like purified terephthalic acid (PTA) and Linear Alkyl Benzene (LAB) for delivery at various points near the border during talks with Pakistan Commerce Minister Humayun Akhtar early Tuesday.

With the budget presentation preoccupying the Pakistan ministers, Aiyar's meeting could not be held Monday.

India's plans to supply 325,000 tonnes of diesel to Pakistan from its refinery at Panipat from October this year is only feasible provided Pakistan agrees to remove Indian petroleum and petrochemical products from the negative list.

Pakistan currently imports around 4.5 million tonnes of diesel annually.

Given the logistic advantage, India is confident that its diesel supplies would be more favourable even compared to the concessional rates at which Pakistan is getting supplies from Kuwait.

Besides the Panipat refinery in Haryana, IndianOil is studying plans for setting up another refinery at Bathinda in Punjab, which would also provide scope for more exports to Pakistan.

During talks with the Pakistan commerce minister, Aiyar also presented keenness for a long-term diesel supply to Pakistan via a pipeline from Panipat.

Besides trade, chief executives of IndianOil and GAIL (India) Ltd are also here to explore investment and joint cooperation prospects.