Iran-India gas pipeline back on the shelf

Although the Indian government sees security of supply as a key issue in burgeoning demand for energy sources like gas, foreign experts who have been studying the global demand for gas predict that the Iran-India gas pipeline option "is now back on the shelf".

Privately, government officials range the chances of a pipeline for import of gas from Iran to India via Pakistan, between "highly improbable" and "impossible".

Speaking at a seminar on the third Asia Pacific Executive Forum organised by the Confederation of Indian Industry (CII) and the US-based East-West Centre, RM Abhayankar, secretary in the external affairs ministry, said there was new recognition that terrorism was a global phenomenon.

Though there was a growing demand for energy resources, security of supply overrode all other considerations, he added.

In this context, arrangements were already in place with Sudan and Siberia and hydrocarbon options were being discussed with Sudan.

But presumably referring to the Iran-India pipeline, he said security of supply remained a key issue.

Although the Prime Minister Atal Bihari Vajpayee's visit to Islamabad had restarted a process of normalisation of India-Pakistan relations, "dialogues could be taken forward only if hostility and violence stopped".

But other speakers at the conference were bullish about the pace of the Iran-India pipeline via Pakistan in the changed political scenario.

Speaking at a session on India's role in the global energy context, Fereidun Fesharaki, who is a reputed expert on energy economics and has been energy advisor to the Prime Minister of Iran, said Iran appeared to be willing to proceed with signing a contract with Pakistan for around 500-600 million cfd of gas.

In his presentation, Fesharaki said once the pipeline was in place by 2010-2011, eventually it might see a spur line, linking it to the Indian border. He said this could happen between 2012 and 2015. He said this import option was the cheapest for India.

Fesharaki was less sanguine about gas supplies from Bangladesh which would have been the second cheapest option for India to import gas and which the government of India thinks is more viable than gas from Iran.

He said political disagreements on the part of Bangladesh and""to a lesser extent"""lack of serious commitment on the part of India has closed the door."

"Will it ever reappear? We believe it will, but perhaps some time in the next decade," Fesharaki said.

The discovery of gas in Myanmar, partially owned by GAIL and ONGC represented a new option for Indian supply sources of gas, he added.

The import of gas is an issue mired in diplomatic controversy and a breakthrough could represent a diplomatic triumph. India distrusts the Pakistan route for Iranian gas, despite being under some pressure from Iran.

The Bangladesh deposits of gas are weighed down by conditionalities spelt out by Bangladesh and are unlikely to come to India.