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Saturday, March 6, 2021

India’s Pipeline Dilemma

Reading Time: 3 minutesTo overcome issues of transporting natural gas, India needs to focus on domestic production while continuing with alternative transportation of LNG, writes JARRYD DE HAAN

Various pipelines which will potentially involve India remain a key subject of discussion in both source and transit countries. Pakistani Prime Minister Nawaz Sharif visited Turkmenistan President Gurbanguly Berdimuhamedov in the Turkmen capital on 20 May as part of an effort to increase energy, trade, road and rail links with the Central Asian region.
During the visit, both leaders stressed the need to fast-track progress on the Turkmenistan–Afghanistan–Pakistan–India (TAPI) natural gas pipeline. At the same time, recent progress in an Iranian nuclear deal has increased prospects for the proposed Iran-Pakistan-India-China (IPIC) natural gas pipeline, which also involves India.
New Delhi has also shown interest in a major extension of the proposed “Power of Siberia” natural gas pipeline to India, which is currently planned to run from Siberia to China.

While the many different proposals for gas pipelines through the South Asian region look promising for India, each comes with a number of issues. A major issue plaguing both the TAPI and IPIC pipelines is that they both pass through the Baluchistan province of Iran and Pakistan.
Since 2005, there have been 229 attacks on gas pipelines running through Pakistani Baluchistan, including eight this year that involved blowing up a gas pipeline.
In regard to the IPIC pipeline, the prospect of sanctions being lifted on Iran, and China’s agreement to build part of the pipeline in Pakistan, seem to have overcome the biggest obstacle to the project.
There remains, however, the issue of Middle East tensions. With Iran up against the Gulf Co-operation Council (GCC) in a number of regional conflicts, there is the risk that this source of energy may be subject to a growing rift between Tehran and the Sunni-majority GCC.
For the TAPI pipeline, security concerns in Afghanistan, along with the fact that no company or consortium has stepped forward to manage, design, construct or operate the pipeline, continue to hinder that proposal. Finally, India may not wish to depend on China for gas flows in the case of a pipeline running from Siberia through to China and into India.
Since India has lacked the infrastructure to import piped natural gas, importing liquefied natural gas (LNG) has been the alternative solution.
Currently, India’s regasification capacity is approximately 15 to 16 million metric tons per annum (MMTPA), while the design capacity of pipeline network in India is equivalent to around 85 to 90 MMTPA. To meet increasing energy demands through imports, New Delhi either has to drastically increase its LNG regasification capacity or quickly develop one of the proposed pipelines.

According to official statistics published by the Indian Government’s Ministry of Petroleum and Natural Gas, the country’s natural gas production has declined in recent years, with the value of imports recently doubling from US$2.3 billion to US$5 billion in 2011-12. Recoverable reserves of natural gas also sit at around 1.4 trillion cubic metres.
This means that there is ample room for expanding natural gas production while reducing imports and, therefore, avoiding any of the problems that may come with a new pipeline. Although this is only a short-term solution to meet India’s immediate requirements, it may buy New Delhi enough time to address the issues surrounding the proposed pipelines or to develop alternative options.
Even though the prospects for such pipelines remain some way off, India urgently needs to meet its growing energy demands. This will require continued LNG imports and the expansion of the infrastructure in this sector. Looking at the longer term, and provided that the various obstacles can be overcome, it does seem that a pipeline will be India’s best guarantee for energy security.
Republished with permission from Future Directions International

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