The Game of Gas Pipeline Projects

By Imran Farooqi

Update: Indian real designs were exposed the behind the Iran-Pakistan-India (IPI) gas pipeline, when in the past, Pakistan and Iran decided the sign the project without New Delhi’s participation as the latter was reluctant to join the project due to pro-American tilt.. In this regard, during very important sessions held in Tehran from September 24 to September 26, 2007, Indians did not indicated unjustified excuses, and no one was left with any doubts about the interests and the changed priorities of the Indians.

However, question arises as to why is there a controversy today about this pipeline? It should be known to all and sundry which country was keener than others for this dream to turn into a reality. The Indian version justifies that the IPI gas pipeline was first mooted in 1989 by Dr R.K Pachauri, Director General of TERI in India, and Dr A.S Ardekani of Iran in 1989. Iran has the second largest gas reserves in the world. It made sense to supply gas to India, which was then gas-deficient and still is. According to Pakistan, which would be a transit state, Pakistan and Iran signed a preliminary agreement for the construction of a natural gas pipeline in 1995 linking the gas field in the Persian Gulf with Karachi, Pakistan’s main industrial port located on the Arabian Sea. Iran later proposed an extension of the pipeline from Pakistan to India. This pipeline, if implemented, will not only meet India’s growing energy demand to a great extent, but will also benefit Pakistan from Iranian natural gas exports as Pakistan’s territory will be used as a transit route.

In fact, the US was never pleased to hear about this gigantic project. Ryan C Crocker during his posting as the US ambassador in Islamabad very openly said while talking to the state-run TV that impeding the IPI gas pipeline was never in the US interest but it would be “going too far” to say that the US supported the IPI gas pipeline project if the US showed concern for Pakistan’s energy needs. This could be the starting point to understand the ‘impeding theory’, but to identify the real hurdles one has to read the Indian mind. As a matter of fact, the main problem is that the Indians fear that Pakistan being a transit country, it could interfere and stop the flow of gas to India, as the relations between India and Pakistan seem to go up and down with the tide. However, its fear was rejected by one of their own Dr. R.K Batra who sometimes ago wrote in his article, ‘Gas without Borders’, that these Indian fears were notwithstanding the fact that the Indus Water Treaty between the two countries had operated smoothly to the extent that in the public domain there was hardly any discussion on it. It was the rocky relationship between the two countries, basically on Kashmir, that stymied any progress for the years to follow.

The background of India opposing the IPI is very interesting. Initially the idea was mainly opposed due to the historically traditional tense relations and rivalry for which the pipeline’s end country came with an alternate idea for the development of a deep sea pipeline where no threat to security of resources would exist. But before giving you a brief about that deep-sea pipeline idea, let me explain to you the fresh and interesting reason for abstaining from the meeting given by one Indian official who said, “We have communicated to Iran’s petroleum ministry’s special representative and Pakistan’s petroleum secretary that we will not be attending the trilateral meeting unless the bilateral issues are resolved with Pakistan.” To, much surprise, when a bilateral meeting of the officials from India and Pakistan was scheduled to be held in Islamabad in August this year, India presented a ‘compelling’ reason to call it off at the last moment by cancelling her appearance, citing pressing urgencies at home (certainly not a bad stomach). For this 2,700 kilometre (km) long IPI, a 44 inch pipeline has to be laid from the Iranian coast city of Assaluyah, from where the gas from the South Pars field would be pumped 1,115 km across the Iranian terrain to the Pakistan border and another 760 km through Pakistan to the Indian border. The pipeline would link up with Pakistan’s own gas network, the Sui Northern Gas Pipeline Limited (SNGPL), as well as its southern counterpart before entering India at a distance of 70 km short of the Indian border. Within India, a further 900 km would be required to connect with the north Indian market. It was anticipated that at its full capacity Pakistan would use about 60 Million Metric Standard Cubic Meter per Day (MMSCMD) and India 90 MMSCMD. The total cost of the project was estimated at $ 4 billion.

Taking cognizance of the Indian idea of laying a deep sea pipeline from here on, the proposed offshore venture would compel India to spend about $ 10 billion. The Indians were ready to bear an extra cost of $ 6 billion, but not to let Pakistan earn about $ 700 million per annum, which the latter would have earned as a transit country. This ‘Peace Pipeline’ has a number of aspects that need to be emphasised, so first of all it has to be seen why India accepted this project. Basically, the Indians have a large number of economic interests in Indo-Iran bilateral trade. Thus it was not possible for them to say a blunt ‘no’ to the Iranians. It was about a couple of years back when Khatami was the Iranian President that during his visit to India, both the countries signed seven different agreements. Those agreements covered the fields of cooperation in science and technology, culture and water management and an invitation to the Indian investors to walk into the Iranian energy sector, but most important of all was the lucrative offer to use the new transport corridor from the Iranian port of Chahbahar to the Afghan town Delaram, which literally watered the Indian mouths. Keeping all this in mind, one can conveniently understand why it is so thorny for the Indians to simply move out of this pipeline deal with the Iranians.

Another cause given by the Indians for delaying this deal is the so-called security hazard or threat to the pipeline, as it would pass through Pakistan. Not that the Indians did not know about its route previously, instead they never thought that it would materialise so soon, especially when they played every unethical game to strangulate this pipeline. Just to remind my readers, as far back as 2003, a few miles away from the Sui fields, a skirmish between the rival Mazari and Bugti clans took place. On the face of it, this seemed like a tribal feud. But within 24 hours, when the Sui Southern Gas Pipelines Limited (SSGPL) pipeline near the PPL airfield was blown up with a direct rocket hit, it conveyed an altogether different message since it was nicely timed with the then Iranian President Khatami’s visit to India. The loud thinkers considered it an attempt to spoil the reconciliatory efforts for Pakistan-Russian relations, however, the real motive was something else. Whatever the case was, notwithstanding their desperate efforts, the Indians could not convince the Iranians about their hypothetical security concerns vis-à-vis Pakistan. After all, how could they tell them that their fear is in relation to making a mockery of the Sindh-Taas Agreement by them and controlling the five rivers originating from Kashmir, hence it would now be Pakistan’s turn to strangulate their lifeline if it turns vindictive (as the Indians thought it might).

The reason is Indian’s exploratory drilling since a decade in Block 26 of Krishna-Godavari off Andhra Pradesh and some adjacent blocks, which are believed to have huge gas reserves. The Mumbai-based Reliance Industries struck some recoverable gas reserves equal to more than five trillion cubic feet, from its first five exploration wells in the area. The results are so encouraging in those blocks that the Indians might back off from the deal, but the agitated Iranians would be the ones who would call the shots ignorantly and would relieve the smart Indians.

In this respect, the major reason is the American view of not favouring the Iran-Pakistan-India (IPI) pipeline while making the unrealistic suggestion that nuclear energy can meet all the Indian needs. However, those who know about the US grudge against the Iranians are well aware that the former has been opposing India’s gas deal with Iran because of the latter’s nuclear programme and its stand-off with the US and the West. India cannot have exclusive reliance on nuclear for many reasons. Renewable technology is not yet so easy and has yet to prove it can play a major role. Without clean coal technology, coal will cause more harm than good. But the relentless opposition of the US will make it difficult for India to aggressively approach the IPI, as it needs too much energy too soon. The IPI is one of their probable options. India is aware of it, but has compulsions to play negative diplomatic games.

While, Central Asia’s energy game is escalating, China has snatched the limelight with a prestigious push into Kazakhstan’s energy market. The US and Russian companies remain the major players in the contest to develop and export the energy resources of Central Asia and the Caspian Basin. In addition to the IPI option, the Indian officials are interested in the Turkmenistan-Afghan-Pakistan-India (TAPI) pipeline project, which would ship natural gas in Turkmenistan via Afghanistan and Pakistan to markets in India. Indian Prime Minister Manmohan Singh, during his visit to Afghanistan in August 2005, said at a joint news conference with Afghan President Hamid Karzai that, “We need both pipelines.” However, India continues to play games.

Iran has probably understood the Indian delaying tactics and the motives behind it and that is why the Iranian oil minister’s special envoy for the peace pipeline announced after the very important session held at Tehran that Iran and Pakistan would sign the IPI gas contract by October 31. Both the sides settled problems and finalised the contract in this session, after which the Iranian oil ministry official confirmed that the last round of talks would be held in Pakistan in mid-October with the aim of confirming the text of the contract.

Indians very well know that whichever pipeline – IPI or TAPI – they might opt for, Pakistan in any case cannot be bypassed. It is high time for the Indians to admit this ‘bitter’ reality, shun all nefarious games and listen to their experts who said that India is an energy-starved country. India’s growing economy demands to have a project like this big deal of $ 7.4 billion to supply gas to them. However, right now the project has a big question mark whether the ‘peace pipeline’ will contain the initial ‘P’ only or the concluding one as well, and it is India that has to make this decision, primarily for its own survival.

 

 

About Marc Brentwood

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