August 08, 2014
The new Indian government hasn’t killed the idea of buying natural gas from Iran, but it has launched a new idea of piping both gas and oil from Russia, which would likely reduce interest in Iranian oil and gas—if the pipelines ever materialize.
Pipelines over the Hima-layas would solve the political problem of getting Iranian gas across Pakistan, which isn’t trusted by India to keep the gas flowing. However, pipelines over the Himalayas would be extremely expensive.
The Hindustan Times reported Tuesday that the new government of Prime Minister Narendra Modi wants to import huge volumes of natural gas and oil from Russia.
It said a gas pipeline alone would cost $40 billion. That is almost four times the cost of the $10 billion Iran-Pakistan-India (IPI) gas pipeline project, which has failed to take off due to security concerns over the pipeline traversing Pakistan and over Iranian contract demands that are unacceptable to India. That project has been stuck on the drawing board for two decades.
The Hindustan Times said senior government officials told it the interest in a pipeline from Russia follows Prime Minister Modi’s recent meeting with Russian President Vladimir Putin.
The Prime Minister’s Office (PMO) along with the Ministry of Petroleum and Natural Gas are preparing a blueprint to examine the feasibility of this new project, the officials said.
An announcement is expected to be made in December when the two leaders meet at the India-Russia annual summit to be held in New Delhi.
“This government [under Modi] is taking all steps that will lead to a reduction in India’s oil [and gas] import bill…. Apart from this proposed pipeline, reviving and pushing the other two projects—IPI and TAPI are also being looked into at the highest level,” one official said. TAPI is the Turkmenistan-Afghanistan-Pakistan route to India pipeline. It has the disadvantage of crossing not only Pakistan but disorderly Afghanistan.