Cabinet gives nod to end pipeline travails

Amidst security concerns of the proposed gas pipelines through Pakistan and Afghanistan, Indian authorities have waved the green signal for holding talks with these countries to secure gas supplies from Iran and Turkmenistan.

Amidst security concerns of the proposed gas pipelines through Pakistan and Afghanistan, Indian authorities have waved the green signal for holding talks with these countries to secure gas supplies from Iran and Turkmenistan.

HT Image

Besides Pakistan and Afghanistan, the Union Cabinet on Wednesday also gave its nod to the Petroleum Ministry for holding talks with Iran, Turkmenistan, Myanmar and Bangladesh to secure gas supplies for India through pipelines to meet the increasing energy demands.

"This will significantly enhance oil security of the country," Petroleum Minister Mani Shankar Aiyar said after the Cabinet meeting, chaired by Prime Minister Manmohan Singh.

The three pipelines to India are from Iran to India through Pakistan, another from Turkmenistan to India through Afghanistan and Pakistan, and the third from Myanmar to India through Bangladesh.

India and Iran in January last agreed to finalise the technical details of the $4 billion gas pipeline sometime in February. An Iranian delegation will be visiting India on the eve of the Asian Gas Buyer's summit, slated for February 14, to workout the modalities. According to petroleum ministry officials, both countries will chalk out a term chart relating to possible Iranian gas import through an overland pipeline at India-Pakistan border.

The talks are expected to firm up issues like price, quality and quantity of the gas to be transported through the pipeline.

Preliminary talks were held between Petroleum minister Mani Shankar Aiyar and his Iranian counterpart Bijan Namdar Zanganeh, during the latter's visit to New Delhi earlier last month.

Aiyar is scheduled to visit Teheran in June.

Oil minister Mani Shankar Aiyar and his Iranian counterpart Bijan Namdar Zanganeh on Friday breathed life into the proposed $4.16 billion overland gas pipeline through India, with New Delhi and Teheran agreeing to finalise the technical details next month.

However, India is still concerned over the security of supplies to India through the 2775-km pipeline, 760-km of which will pass through Pakistan.

According to Aiyar "delivery of gas at our border" was of utmost concern and the country would prefer the cheapest option.

According to Iranian officials Pakistan is also keen on the pipeline project to bring Iranian gas for its domestic use on priority.

Iran has two or three options. First, an Iran-to-Pakistan pipeline to meet Pakistan's huge requirement in future. Second, two separate pipelines - one each for Pakistan and Indian markets and third pipeline that feeds both Pakistan and India.

Teheran considers that the third option is the best way to supply gas at the cheapest price.
However, Indian authorities are also concerned about the growing insurgency in Balochistan which could possibly threaten all plans for a transnational pipeline. A large part of the proposed gas pipeline pass through Balochistan and Baloch nationalists have been stepping up attacks on Pakistani government targets.

According to a Pakistani expert, "in the present situation, one cannot guarantee the safeguard of the pipeline."

Islamabad has been beefing up its military presence in the province to meet the threat, with Pakistani military police setting up checkpoints and paramilitary troops patrolling the streets of Quetta.

However, Iran has allayed India's security concerns by assuring that international consortium of bankers and oil firms could build and operate the project. The oil rich nation also expressed willingness to supply gas in the form of LNG in case of sabotage of the line.

Not only the project has huge economic and political potential for India, it would help Pakistan to net a clean 500 million dollars annually from the project, analysts said.

At present, India imports more than 70 per cent of its oil requirements. Recently, India managed to broker deals with its neighbours to build pipelines to bring in gas. Besides Pakistan, New Delhi managed to get an assurance from Bangladesh to pipe gas from Myanmar.

Besides the multi-billion dollar deal for supply of liquefied natural gas (LNG) from Iran, India also reached agreement in principle with Myanmar and Bangladesh on the construction and operation of a pipeline that will bring natural gas from Myanmar to India via Bangladesh.

The pipeline, which is likely to cost over a billion dollars, will carry natural gas from the Shwe fields in Myanmar's Rakhine or Arakan state, through the Indian states of Mizoram and Tripura, then into Bangladesh before finally crossing back into India, all the way up to Kolkata.

Oil ministers from the India, Bangladesh and Myanmar reached an agreement last month to build the pipeline , estimated to cost $1 billion.

Bangladesh will earn about $125 million annually in transit fees for the pipeline if the deal comes through.