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India, Pak experts to study Indo-Iran gas pipeline

Ramesh Menon in New Delhi

In a major step towards developing closer Indo-Pak economic ties, energy researchers in Pakistan and India will jointly study the feasibility of a pipeline from Iran to supply natural gas to the South Asian neighbours, the Tata Energy Research Institution said on Monday.

The Tata Energy Research Institute will conduct a nine-month study on all aspects of the proposed pipeline project jointly with the Hydrocarbon Development Institute of Pakistan.

Both will draw from their own resources for the study.

The Indo-Iran pipeline project that would bring natural gas from Iran to India is expected to figure in the summit talks between Prime Minister Atal Bihari Vajpayee and President Pervez Musharraf.

Pakistan and Iran have both expressed keenness on the project.

However, India has had some reservations on the inland route of the pipeline, which was to pass through Pakistan.

India is also considering a costlier option of a deep-sea pipeline that would circumvent Pakistan, a country with which it has gone to war three times.

Indian officials say a decision on the route for the pipeline would be taken only after feasibility studies for both options are available.

Rajendra Pachauri, director general of TERI, said that the study would conclude with recommendations to both the governments to help facilitate the necessary institutional arrangements and suggestions for a legal framework."

Pachauri said the joint study would go beyond the technical aspects of the project.

"Besides studying the techno-economic feasibility of the project, there is a pressing need to sensitise opinion makers on the two sides of the border on the opportunities, costs and benefits of the project."

Ali Shams Ardekani, former deputy foreign minister of Iran, will be the advisor to the project.

The study would carry out comprehensive analyses of the economic, contractual and legal aspects of the project; initiate discussions with project promoters, governments and concerned agencies to assess the progress made till date; and identify critical problems.

Issues identified from the analysis would be brought into the public domain to facilitate informed discussions. TERI and HDIP would spearhead consultations in both countries, through collaborative analyses, seminars and workshops.

Two joint workshops with participants from both the countries are also planned during the nine-month study. Employing such track two initiatives, the study attempts to pave the way for facilitating the implementation of the project.

Meanwhile, feasibility studies have been initiated for both the onshore and offshore options of the pipeline that will bring natural gas from Iran to India.

The National Iranian Oil Company has reportedly engaged Australia's BHP to conduct a feasibility study for the onshore route, while the feasibility of the offshore route is to be analysed by Snamprogetti of Italy.

Long-term projections indicate that the demand for gas in India is likely to go up from the present 74 to about 322 million cubic meters per day by the year 2025.

Domestic gas availability on the other hand is expected to come down to about 36 million cubic meters per day within the same period, necessitating large-scale imports.

Similarly, gas supply in Pakistan, currently 71 million cubic meters per day, is expected to increase by 50% in the next five years.

However, unlike the Indian case, much of this increase would be met through an increase in domestic gas production.

Gas production in Pakistan is expected to increase substantially as new fields like Sawan, Zamzama and Bhit come on stream. However, the longer-term outlook would justify significant imports of gas by Pakistan as well.

The major area of production of hydrocarbons continues to be the Middle East, and the bulk of oil imports into India and Pakistan are currently sourced from the Middle East.

With constraints on indigenous production of hydrocarbons in both these nations, dependence on oil imports is expected to grow substantially in the coming decades.

However, the Middle East is also rich in natural gas, and in particular, Qatar and the southern portion of Iran have significant resources of gas, for which the most attractive market would be South Asia.

Since Bangladesh has substantial reserves of natural gas within its own territory, the most logical destination for Qatar or Iranian gas would be India and Pakistan.

Both offshore and onshore routes are under consideration, though Iran and Pakistan are both in favour of the latter, as the offshore option could turn out to be considerably more expensive than the estimated $4.5 billion onshore route.

The Indian government has had reservations about the inland route based on perceptions of problems connected with security of supplies.

But with Iran agreeing to ensure that Pakistan assures security of the pipeline, it may become a reality.

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