Iran, Pakistan dump India on
pipeline By Siddharth
Srivastava
NEW DELHI - Even as New Delhi
grapples with domestic leftwing opposition to the
India-United States civilian nuclear deal, Iran
and Pakistan have finalized their section of a
US$7.5 billion gas pipeline that Washington
opposes.
India, Pakistan and Iran are the
original partners of the 2,700-kilometer IPI
"peace" pipeline that they wanted to complete by
2012 to transfer Iranian natural gas from its
South Pars field to India via Pakistan. But, it is
apparent now that New Delhi has
been
dumped, for the time being at least.
Last
week, Iran's deputy minister in charge of the
pipeline, Hojatollah Ganimifard, was quoted by the
Iranian Oil Ministry's news service Shana as
saying, "The content of the peace pipeline
contract has been finalized and all the points
prepared by the two sides' legal experts have been
re-read and agreed by the two sides [Iran and
Pakistan]." He said the two sides would ink the
contract in December "without a third partner".
And this week, Mokhtar Ahmad, advisor to
Pakistani Prime Minister Shaukat Aziz, was quoted
as saying, "As we expected, the text of the peace
pipeline has been made ready for the signing by
the two states' heads." Pakistan said that any
excess gas that would have been destined for India
could be transferred to China.
Both Tehran
and Islamabad have blamed India of delaying
progress of the IPI at the behest of Washington,
which does not want nations to deal with Iran due
to its bid to pursue an independent nuclear
program. Among the issues that New Delhi has
raised on the IPI include security guarantees,
transit fees it must pay to Pakistan and a price
revision clause on which Tehran insists.
New Delhi also did not take part in what
was meant to be a tripartite conference in Tehran,
saying that it needed to sort out bilateral issues
with Pakistan first.
There is a thought
that New Delhi feels it can afford to let the IPI
slip due to the discovery of huge gas reserves on
India's eastern coast, the Krishna-Godavari basin,
that private sector behemoth Reliance Industries
plans to begin selling soon.
New Delhi has
also been unhappy with Tehran reopening price
negotiations to a separate liquefied natural gas
(LNG)deal signed earlier. India has been looking
at Qatar, Algeria and Russia instead to serve its
LNG needs.
As an alternative, India is
also seriously looking at the prospects of taking
natural gas from Turkmenistan via Afghanistan and
Pakistan, due to the heavy doses of tax breaks
that have been proposed to push this $3.5 billion
pipeline project that is supported by the US.
Although publicly New Delhi has maintained
that it stands by the IPI pipeline, the reality is
going to be different.
"The final deal [on
IPI] is not going to happen in the near future as
the project is no longer just about energy
security, it's more about India's strategic
position in the global community," a Foreign
Ministry official told Asia Times Online on
condition of anonymity.
"The project is in
the radar of the Prime Minister's Office and
unless there is a clear signal from there, it is
unlikely that India's Petroleum Ministry will
agree to any final arrangement," he added. US
Treasury Secretary Henry Paulson, during a recent
visit to India, is believed to have recommended
that Delhi not go ahead with the project. And
subsequently Treasury Under Secretary for
International Affairs David McCormick told
reporters that the US hoped India would not move
forward with the pipeline. He said "it would not
be the right path during a time the world should
be imposing greater discipline on its interactions
with Iran". He added that India should meet its
energy needs through the nuclear deal with the US
that is now stalled in the Indian Parliament.
Russia left out There are
official and media indications that progress in
India-Russia nuclear cooperation has also been
deliberately delayed, as New Delhi does not want
to upset the US.
It was expected that the
highlight of Indian Prime Minister Manmohan
Singh's visit to Russia this week would be a
far-reaching civilian nuclear agreement, with
Moscow to help India build four reactors to
produce electricity.
But the deal has been
deferred as Washington apparently would not have
stood for India deepening its nuclear engagement
with Russia at a time when the India-US nuclear
pact is stalled. If ratified by India and then by
the international Nuclear Suppliers' Group (NSG),
the latter agreement will allow US companies
lucrative access to India's civilian nuclear
development programs.
India's official
stand is that the NSG still has to debate India's
global nuclear status, but this has not prevented
New Delhi from dealing with Russia on nuclear
matters in the past.
Meanwhile, Washington
has also made it clear that Indian private sector
major Essar Steel's plans to enter the US's iron
and steel sector with a $1.6 billion steel plant
in Minnesota will be stymied if the company goes
ahead with building a refinery in Iran.
Recently, pension funds from the US,
including Calpers (California Public Employees'
Retirement System), wrote to global oil companies,
including Indian state-explorer Oil and Natural
Gas Corporation and the Essar Group, cautioning
them about investing in Iran.
The funds
have indicated that future international sanctions
may jeopardize such operations involving Iran,
which is an indicator of stronger US action in the
pipeline against Iran.
Siddharth
Srivastava is a New Delhi-based
journalist.
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