India spreads its net for gas, any
gas By Siddharth Srivastava
NEW DELHI - While efforts are under way to
seal nuclear deals with the US and France to
generate electricity, India's efforts to tie up
gas resources as another alternative to fossil
fuels have gathered momentum.
Following
the decision by Myanmar to supply gas to China,
India is now making swift maneuvers to ensure that
the US$1 billion Myanmar-Bangladesh-India (MBI)
gas pipeline materializes. And significantly,
India has virtually decided to join the US-backed
Turkmenistan-Afghanistan-Pakistan (TAP) pipeline, in part because of the geopolitical
difficulties involved in the $7 billion
Iran-Pakistan-India (IPI) pipeline that Washington
opposes.
Paradoxically, New Delhi has
found an uncommon ally in Islamabad, which is
pushing for India's involvement in the TAP as well
as the IPI.
Gas on TAP This
month, Delhi for the first time took part as an
observer in a meeting of the steering committee of
the TAP project. Now it appears ready to
sign on as a participant in the Washington-backed
$3.5 billion gas pipeline as an alternative to the
IPI.
Prime Minister Manmohan Singh had
discussed the IPI proposal with Petroleum Minister
Murli Deora and his Pakistani counterpart,
Amanullah Khan Jadoon. Jadoon reiterated
Islamabad's commitment to the IPI, despite US
misgivings, and at the same time extended support
for India's bid to join the TAP.
While
India, Pakistan and Iran go through the motions of
pursuing the IPI project, apparently unaffected by
the International Atomic Energy Agency's referral
of Tehran to the UN Security Council, most
observers claim that the prospects of the pipeline
materializing are now remote. Despite domestic
political pressures, India has so far sided with
Western powers against Tehran pursuing an
independent nuclear program.
In
this context, India was an observer at the recent
TAP meeting in the Turkmen capital Ashgabat.
Dinsha Patel, minister of state for petroleum and
natural gas, led the Indian delegation and
expressed willingness to join the TAP. A
memorandum of understanding (MoU) was signed at
the conclusion of the two-day meeting, under which
Turkmenistan will supply 3.2 billion cubic feet
gas per day to Pakistan for a period of 30 years.
India is closely studying the project's
geopolitical, financial and technical aspects.
Afghanistan and Pakistan have been seeking India's
participation as vital for the TAP's viability.
"We have 90 days to get necessary official approvals
to join the project. Once approved by the
cabinet, the project will be renamed TAPI," for
Turkmenistan-Afghanistan-Pakistan-India
pipeline, Deora said in a statement. According
to reports, the Oil Ministry will now seek
government approval for joining the project within
the next three months.
New Delhi, it
seems, is satisfied with the availability of gas
resources as well as the viability of the project,
which has the backing of the Asian Development
Bank. The TAP would stretch from the
Turkmenistan-Afghanistan border in southeastern
Turkmenistan to Multan, Pakistan (1,270 kilometers), with
a 640km extension to India.
Importantly, TAP does not involve Iran or
the US, which means none of the geopolitical
problems involving the IPI. The TAP not only
provides a southern exit route for land-locked
Central Asian gas that will not have to cross Iran
or Russia, it is also an important cog in
Washington's Afghan rehabilitation plan as it will
earn substantial transit fees.
Turkmen Oil, Gas and Natural
Resource Minister Gurbanmyrat Ataev said that
Ashkhabad considered TAP to be a priority gas
export route. "This market is attractive first of
all because of its closeness and rapid growth in
consumption and secondly because Turkmenistan, as
a neutral state, can in fact help strengthen
regional cooperation and increase the economic
prosperity of the people in the region."
With potential hydrocarbon reserves of
over 45.44 billion tonnes of oil equivalent,
Turkmenistan can significantly increase supplies
to the international market.
Mired in
Myanmar Irked by the delays in
implementing the Myanmar-Bangladesh-India
pipeline, Myanmar recently inked an MoU with
PetroChina to supply 6.5 trillion cubic feet (tcf)
of gas from Block A of the Shwe gasfields in the
Bay of Bengal for over 30 years.
The
decision came as a major blow to India's bid to
tap gas from its eastern front. It also marked one
more victory for Beijing energy giants, which have
consistently been beating Indian energy firms in
the acquisition of oil and gas reserves around the
world. India's state-owned oil giant Oil and
Natural Gas Corp (ONGC) has lost to Chinese
companies, in Kazakhstan, Ecuador and Angola.
Now, with Block A-1 gas going to
China, the cost of the MBI will increase as the
available block close to Bangladesh is A-2, which
will require an additional 150km of pipeline
for the gas to reach India.
This has
provoked India to appoint Brussels-based Suz
Tractebel as technical consultants to study a
different route for the pipeline through the
northeast, bypassing Bangladesh. The European
infrastructure consultants appointed by the Gas
Authority of India (GAIL) have been briefed to
"carry out a study for preparing a detailed
feasibility report, an environment management plan
and a rapid risk analysis study via the northeast
Indian territory", the Ministry of Petroleum
announced.
GAIL is also exploring the idea
of transporting gas from Myanmar via the sea.
According to reports, GAIL is planning to invite
bids for a long-term chartering service of ships
or barges for the purpose.
These moves
come a year after India, Myanmar and Bangladesh
signed a trilateral pact to collaborate on the MBI
project, which is also aimed at helping Bangladesh
carry gas from its surplus regions to deficit
areas.
The demand for compressed natural
gas (CNG) and liquefied natural gas continues to
grow in India, with over 300 CNG stations and over
300,000 vehicles running on CNG. The delay in
Bangladesh firming up the agreement saw a worried
Yangon, which is keen to exploit the financial
viability of its new gas finds, acceding to
China's demands for gas supplies after
persistently urging India to tie up alternative
plans, including setting up power projects near
the gasfields.
Myanmar is concerned that
India will be unable to evacuate gas once the
reserves are certified by a third party agency and
are made available for commercial production.
India's ONGC and GAIL, along with two South Korean
companies, Korea Gas and Daewoo, have agreed to
jointly develop the block. But there is no
agreement on evacuation, with both India and China
at an equal distance from the gas blocks.
Though Bangladesh stands to earn
substantial transit fees of $125 million per year,
it has set conditions that include creation of
corridors through India to carry out trade with
other neighbors, such as Nepal and Bhutan, as well
as steps to reduce its $2.5 billion trade deficit
with India. Clearly, New Delhi has made up its
mind to bypass Dhaka, even though the cost of the
pipeline stands to increase substantially.
For the past year, New Delhi and Yangon
have been exploring independent alternatives for
importing gas. Bangladesh was not invited to the
third meeting on the project. New Delhi has talked
of the possibility of constructing the pipeline
from Myanmar into Mizoram and onwards to Assam
(both in northeast India) and culminating in West
Bengal. The shortest pipeline route is from
Myanmar to Bengal through Bangladesh, while the
alternative land route would be twice the
distance.
Thus, given the economic
advantages as well as higher feasibility, India
opened another window for negotiations with
Bangladesh. Former foreign minister Natwar Singh
visited Dhaka in August last and said that the
tri-nation project would not proceed without the
involvement of Bangladesh.
Last month,
former petroleum minister Mani Shanker Aiyer
visited Beijing. India and China signed a slew of
MoUs on energy cooperation, including between ONGC
Videsh Ltd, India's flagship firm for overseas oil
and gasfield acquisitions, and China National
Petroleum Corporation (CNPC). In the first
instance of Sino-Indian cooperation, India and
China won a joint bid in December last to buy
PetroCanada's 37% stake in Syrian oilfields for
$573 million.
However, most observers
believe that any cooperation in future can only be
on a case-by-case basis, with the Myanmar-China
deal demonstrating that when it comes to energy
security, nations will go it alone if they can.
Siddharth Srivastava is a New
Delhi-based journalist.
(Copyright
2006 Asia Times Online Ltd. All rights reserved.
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appears ready to
sign on as a participant in the Washington-backed
$3.5 billion gas pipeline as an alternative to the
IPI. 
