Spectre
SENIOR MEMBER
- Joined
- Jun 4, 2015
- Messages
- 3,735
- Reaction score
- 46
- Country
- Location
Modi and the Sino-Indian Game for Iranian Gas
Indian Prime Minister Narendra Modi’s recent visit to Turkmenistan as part of his tour of the five Central Asian republics was a critical opportunity for New Delhi to advance the Turkmenistan-Afghanistan-Pakistan India pipeline (TAPI), slated to transport to million cubic meters per day of natural gas to India, helping the world’s fastest growing major economy meet its own skyrocketing demand.
However, instead of announcing a major Indian initiative to expedite the selection of TAPI’s consortium leader, the hurdle that has stymied TAPI’s implementation, Modi suggested that an alternative land-sea route via Iran for transporting Turkmen gas should also be considered. Modi’s high profile plug for an Iran-Oman-India subsea pipeline by proposing its use for Turkmen gas exports was a savvy diplomatic gesture aimed at Beijing’s April 2015 agreement with Islamabad to construct most of Pakistan’s portion of the Iran-Pakistan (IP) pipeline. Coming just days before the Iran and the P5+1 announced the Iran nuclear deal, the suggestion was the prime minister’s opening shot in a Sino-Indian mini “Great Game” to orient the flow of gas exports from a post-sanctions Iran.
The Iran-Pakistan (IP) pipeline was originally conceived in 1995 as the Iran-Pakistan-India (IPI) pipeline, a project that would have delivered 31 million cubic meters per day (mcm/d) of Iranian gas to India. Under Washington’s pressure after the 2008 U.S.-India Civil Nuclear agreement, New Delhi withdrew from the project in 2009. Meanwhile, China revived the IP pipeline in the wake of the April 2, 2015 Framework Agreement between Iran and the P5+1 nations over Iran’s nuclear program. On April 20, 2015, Beijing signed an agreement with Islamabad to construct a pipeline from Pakistan’s Chinese-built Gwadar port to Nawabshah, where it can join Pakistan’s domestic gas distribution network. A boon for energy-starved Pakistan, the IP pipeline will deliver enough gas from Iran’s massive South Pars field to generate 4,500MW of electricity, covering Pakistan’s current shortfall in power production.
For Beijing, the IP pipeline is an energy geopolitics power move, advancing China’s Silk Road Economic Belt and Maritime Silk Road initiatives (collectively termed “One Belt, One Road,” or OBOR). The IP pipeline agreement is part of a $46 billion infrastructure package to establish the China-Pakistan Economic Corridor(CPEC), extending from the Chinese-administered Gwadar port on Pakistan’s Indian Ocean coast to China’s westernmost city Kashgar (Kashi) in Xinjiang. A subsidiary of the state-owned China National Petroleum Corporation will construct the pipeline financed by a $2 billion Chinese loan, covering 85 percent of the construction cost. Iran has already built its section of the pipeline to the Pakistani border. Pakistan has promised to construct the remaining 80 km of the pipeline from Gwadar to the Iranian border once sanctions end.
Critical for Beijing, the IP pipeline creates the potential to import Iranian gas via Pakistan through its extension to China’s vast northwestern province of Xinjiang. Home to the restive Uighur minority, Beijing needs reliable gas supplies to rapidly develop the province to secure its integration within China and to establish it as China’s gateway to Central Asia. Xinjiang is one of the principal launching points for China’s OBOR initiative.
India’s answer to China’s OBOR is New Delhi’s International North-South Transit Corridor (INSTC) initiative, centered on India’s construction of a deep-water port in the Iranian coastal town Chabahar, approximately 72 km east of Gwadar. The Chabahar port will serve as INSTC’s Indian Ocean outlet. With India’s overland access to Central Asia blocked by Pakistan and China, Chabahar and the INSTC running northward through Iran and Afghanistan will provide India vital access to Central Asian markets, enabling India to effectively compete with China. India has had difficulty establishing a position in Central Asian oil and gas production, in part, because of its lack of direct access to the region.
With Beijing having already invested more than $50 billion in Central Asian infrastructure projects, India’s INSTC is the tortoise to China’s OBOR hare. While the INSTC is a potential, long-term Eurasian game-changer, an Iran-Oman-India line would immediately and fundamentally alter the pattern of energy exports in the Arabian Sea and with it the geopolitics of the Indian Ocean.
The initiative for an Iran-Oman-India pipeline can also be traced back to another transformational Indian prime minister, the late P. V. Narasimha Rao who raised the idea during his 1993 visit to Oman’s capital Muscat. Twenty-two years later under India’s current change agent prime minister, negotiations between New Delhi and Muscat concerning the pipeline restarted in earnest. In February 2015, India’s External Affairs Minister and Oman’s Foreign Minister concluded an agreement supporting the project, citing technological advancements that increase the project’s feasibility as the motivating factor for the agreement. However, the prospect that an Oman-India pipeline would transport natural gas from a post-sanctions Iran was also a compelling factor.
When the New Delhi-based South Asia Gas Enterprise (SAGE) conducted its study, SAGE analyzed the feasibility of transporting natural gas from Iran’s South Pars field via Oman to India’s west coast. Moreover, the feasibility study was based on a volume of 31 million cubic meters per day, the exact volume India was slated to receive from Iran before it withdrew from India-Pakistan-Iran pipeline.
A week prior to the Iran-P5+1 Framework Agreement, Fox Petroleum issued a proposal for the construction of the Oman-India Multi-Purpose Pipeline (OIMPP), a deep water pipeline system to transport Iranian natural gas via Oman to a receiving terminal on the coast of India’s Gujarat state. Costing an estimated $5.6 billion, the 1,600 km pipeline would transport 8 trillion cubic meters over a 20 year period. Citing recent advances in deep-sea pipeline technology, Fox Petroleum’s chairman asserted that gas imports to India via OIMPP would be less expensive than India’s LNG imports by $1.5-2 per million BTU. The same pipeline system could also be used to transport natural gas from Qatar to India, thereby creating a nexus of Persian Gulf natural gas suppliers oriented toward supplying the world’s fast growing major economy. And, as Modi intimated in Ashgabat the potential would even exist for Turkmenistan to export its gas to India across Iran and via the undersea pipeline.
With Beijing’s strong head start in Central Asia, a post-sanctions Iran is New Delhi’s key to becoming a major player in Eurasia. Modi’s Central Asia tour and his public promotion of an Iran-Oman-India pipeline signal a new round in the Sino-Indian mini Great Game. To advance, New Delhi will have to match Modi’s diplomacy with major investments in energy and transportation infrastructure. The TAPI pipeline and an Oman-India pipeline are the places to start.
Micha’el Tanchum is a Senior Fellow with the Eurasian Energy Futures Initiative at the Atlantic Council
Modi and the Sino-Indian Game for Iranian Gas | The Diplomat
Indian Prime Minister Narendra Modi’s recent visit to Turkmenistan as part of his tour of the five Central Asian republics was a critical opportunity for New Delhi to advance the Turkmenistan-Afghanistan-Pakistan India pipeline (TAPI), slated to transport to million cubic meters per day of natural gas to India, helping the world’s fastest growing major economy meet its own skyrocketing demand.
However, instead of announcing a major Indian initiative to expedite the selection of TAPI’s consortium leader, the hurdle that has stymied TAPI’s implementation, Modi suggested that an alternative land-sea route via Iran for transporting Turkmen gas should also be considered. Modi’s high profile plug for an Iran-Oman-India subsea pipeline by proposing its use for Turkmen gas exports was a savvy diplomatic gesture aimed at Beijing’s April 2015 agreement with Islamabad to construct most of Pakistan’s portion of the Iran-Pakistan (IP) pipeline. Coming just days before the Iran and the P5+1 announced the Iran nuclear deal, the suggestion was the prime minister’s opening shot in a Sino-Indian mini “Great Game” to orient the flow of gas exports from a post-sanctions Iran.
The Iran-Pakistan (IP) pipeline was originally conceived in 1995 as the Iran-Pakistan-India (IPI) pipeline, a project that would have delivered 31 million cubic meters per day (mcm/d) of Iranian gas to India. Under Washington’s pressure after the 2008 U.S.-India Civil Nuclear agreement, New Delhi withdrew from the project in 2009. Meanwhile, China revived the IP pipeline in the wake of the April 2, 2015 Framework Agreement between Iran and the P5+1 nations over Iran’s nuclear program. On April 20, 2015, Beijing signed an agreement with Islamabad to construct a pipeline from Pakistan’s Chinese-built Gwadar port to Nawabshah, where it can join Pakistan’s domestic gas distribution network. A boon for energy-starved Pakistan, the IP pipeline will deliver enough gas from Iran’s massive South Pars field to generate 4,500MW of electricity, covering Pakistan’s current shortfall in power production.
For Beijing, the IP pipeline is an energy geopolitics power move, advancing China’s Silk Road Economic Belt and Maritime Silk Road initiatives (collectively termed “One Belt, One Road,” or OBOR). The IP pipeline agreement is part of a $46 billion infrastructure package to establish the China-Pakistan Economic Corridor(CPEC), extending from the Chinese-administered Gwadar port on Pakistan’s Indian Ocean coast to China’s westernmost city Kashgar (Kashi) in Xinjiang. A subsidiary of the state-owned China National Petroleum Corporation will construct the pipeline financed by a $2 billion Chinese loan, covering 85 percent of the construction cost. Iran has already built its section of the pipeline to the Pakistani border. Pakistan has promised to construct the remaining 80 km of the pipeline from Gwadar to the Iranian border once sanctions end.
Critical for Beijing, the IP pipeline creates the potential to import Iranian gas via Pakistan through its extension to China’s vast northwestern province of Xinjiang. Home to the restive Uighur minority, Beijing needs reliable gas supplies to rapidly develop the province to secure its integration within China and to establish it as China’s gateway to Central Asia. Xinjiang is one of the principal launching points for China’s OBOR initiative.
India’s answer to China’s OBOR is New Delhi’s International North-South Transit Corridor (INSTC) initiative, centered on India’s construction of a deep-water port in the Iranian coastal town Chabahar, approximately 72 km east of Gwadar. The Chabahar port will serve as INSTC’s Indian Ocean outlet. With India’s overland access to Central Asia blocked by Pakistan and China, Chabahar and the INSTC running northward through Iran and Afghanistan will provide India vital access to Central Asian markets, enabling India to effectively compete with China. India has had difficulty establishing a position in Central Asian oil and gas production, in part, because of its lack of direct access to the region.
With Beijing having already invested more than $50 billion in Central Asian infrastructure projects, India’s INSTC is the tortoise to China’s OBOR hare. While the INSTC is a potential, long-term Eurasian game-changer, an Iran-Oman-India line would immediately and fundamentally alter the pattern of energy exports in the Arabian Sea and with it the geopolitics of the Indian Ocean.
The initiative for an Iran-Oman-India pipeline can also be traced back to another transformational Indian prime minister, the late P. V. Narasimha Rao who raised the idea during his 1993 visit to Oman’s capital Muscat. Twenty-two years later under India’s current change agent prime minister, negotiations between New Delhi and Muscat concerning the pipeline restarted in earnest. In February 2015, India’s External Affairs Minister and Oman’s Foreign Minister concluded an agreement supporting the project, citing technological advancements that increase the project’s feasibility as the motivating factor for the agreement. However, the prospect that an Oman-India pipeline would transport natural gas from a post-sanctions Iran was also a compelling factor.
When the New Delhi-based South Asia Gas Enterprise (SAGE) conducted its study, SAGE analyzed the feasibility of transporting natural gas from Iran’s South Pars field via Oman to India’s west coast. Moreover, the feasibility study was based on a volume of 31 million cubic meters per day, the exact volume India was slated to receive from Iran before it withdrew from India-Pakistan-Iran pipeline.
A week prior to the Iran-P5+1 Framework Agreement, Fox Petroleum issued a proposal for the construction of the Oman-India Multi-Purpose Pipeline (OIMPP), a deep water pipeline system to transport Iranian natural gas via Oman to a receiving terminal on the coast of India’s Gujarat state. Costing an estimated $5.6 billion, the 1,600 km pipeline would transport 8 trillion cubic meters over a 20 year period. Citing recent advances in deep-sea pipeline technology, Fox Petroleum’s chairman asserted that gas imports to India via OIMPP would be less expensive than India’s LNG imports by $1.5-2 per million BTU. The same pipeline system could also be used to transport natural gas from Qatar to India, thereby creating a nexus of Persian Gulf natural gas suppliers oriented toward supplying the world’s fast growing major economy. And, as Modi intimated in Ashgabat the potential would even exist for Turkmenistan to export its gas to India across Iran and via the undersea pipeline.
With Beijing’s strong head start in Central Asia, a post-sanctions Iran is New Delhi’s key to becoming a major player in Eurasia. Modi’s Central Asia tour and his public promotion of an Iran-Oman-India pipeline signal a new round in the Sino-Indian mini Great Game. To advance, New Delhi will have to match Modi’s diplomacy with major investments in energy and transportation infrastructure. The TAPI pipeline and an Oman-India pipeline are the places to start.
Micha’el Tanchum is a Senior Fellow with the Eurasian Energy Futures Initiative at the Atlantic Council
Modi and the Sino-Indian Game for Iranian Gas | The Diplomat
...why don't you let them run your country as well?.
