Gas from friendly neighbours: The most viable

Trans-national pipelines can be a welcome source of gas for India but such projects have never been easy to implement.

Industry watchers and oil sector executives say the Myanmar-India pipeline is the most likely to take off soon. Geo-political complications are likely to continue to delay the pipeline from Iran and Turkmenistan, they say.

"We have submitted a report to the government suggesting possible routes the Myanmar-India pipeline can take. We are keen on a pipeline which bypasses Bangladesh, enters India through Mizoram, traverses the North-east and terminates at Gaya," a senior GAIL official said.

Numerous options have been floated. The initial option of a shallow- and-deep water pipeline through Bangladesh ran into trouble when Bangladesh, after agreeing in January to allow the pipeline to pass through its territory, demanded in return a trade and power corridor to Nepal and Bhutan, besides other trade benefits. This led to the government considering the other pipeline which, according to a GAIL report, will have to cover double the distance of the first.

According to GAIL's proposal, the 1,573-km pipeline would have the capacity to transport 18 mscmd (million standard cubic metres per day) of gas. The report says this can be ramped up to 28 mmscmd by installing additional compressors. The cost of the project is estimated to be $3 billion.

In recent times, there have been huge discoveries of gas in Myanmar. Oil and Natural Gas Corporation owns 20 per cent in Myanmar's gas-rich A1 block, while GAIL owns 10 per cent. GAIL has been tasked with marketing the gas from A1 block, which is majority-owned by South Korea's Daewoo International.

GAIL recently signed a deal with Myanmar to drill for oil and gas in A-7 block in the country's west coast.

According to the deal, GAIL would own 30 per cent of the assets, while Silver Wave would be the operator with a 70 per cent stake. India produced 2,753 million cubic metres (mcm) of natural gas in October 2006. This works out to nearly 91.76 mcm per day. The projected demand by 2020 stands at 400 mcm a day.

Another option is to transport gas from Myanmar to Dahej via a marine pipeline.

The tough ones

The other two proposals are the Iran-Pakistan-India (IPI) pipeline and the Turkmenistan-Afghanistan-Pakistan-India (TAPI) line. Discussions on these two have been on since early 2005. However, no breakthrough has been made so far.

Gas pricing and geopolitical issues continue to delay the Iran-Pakistan-India (IPI) pipeline project. Recently, the government said it was considering paying a higher price of up to $4.5 per million British thermal units (BTU) to buy LNG from Iran to help tie up long-term supplies.

Indian oil firms had in June 2005 signed a 25-year deal with National Iranian Gas Export Co to buy 5 million tonnes of LNG a year at a price linked to $31 a barrel of crude oil, which translates into $2.9 per million BTU. Russia has shown interest in being a part of the 2,100-km pipeline

The 1,680-km Turkmenistan-Afghanistan-Pakistan-India pipeline continues to be in trouble. The government recently gave approval in principle for the project, initially started by Turkmenistan, Afghanistan and Pakistan.