Plan to transport Iranian gas to India stalls

The long-discussed proposal to transport Iranian gas to India via Pakistan has again hit a brick wall (OGJ, Oct. 4, 1999, p 25). Pakistan officials in late April approved the proposed passage of that pipeline through their country, pending a final decision by India's BJP-led coalition government. But India's political leadership apparently has decided to ignore the proposal.


MUMBAI�The long-discussed proposal to transport Iranian gas to India via Pakistan has again hit a brick wall (OGJ, Oct 04, 1999, p 25). Pakistan officials in late April approved the proposed passage of that pipeline through their country, pending a final decision by India's BJP-led coalition government. But India's political leadership apparently has decided to ignore the proposal.

"We have officially received no such proposal," said Indian Petroleum Minister Ram Naik. Other sources in the government and Prime Minister's office have asserted that the proposal cannot be considered until ties with Pakistan are normalized.

Iran had proposed a 1,000-km pipeline to India through Pakistan, costing about $4 billion. An earlier plan to route the pipeline through international waters was rejected by India on security grounds.

In early March, following a visit to Tehran by the Pakistan petroleum minister, it was announced that the two countries had decided to green-light the pipeline. Cash-strapped Pakistan reportedly would earn 500-700 million rupees ($11.5-16 million) just by allowing Iranian gas to transit the country.

The announcement evoked surprise in New Delhi, as the BJP government had not yet been informed of the decision. Moreover, senior officials said that, although India badly needs gas to meet its energy needs, the Vajpayee government could not ignore the security implications.

Indian gas demand in 2005 is estimated at 188 million cu m, more than three times current supply levels.

A top-level source in the Prime Minister's Office asked, rhetorically, "How can you trust the Pakistan regime?" He said the government preferred to get natural gas from Bangladesh instead. "That country is sitting on huge gas reserves and the Indian government would like to source it from there."

There are political considerations with this plan, however. The Opposition Nationalist Party in Bangladesh has threatened the ruling Awami League against pledging gas to India. As a result, Bangladesh announced that it will consider exporting gas only after meeting its own needs. The country has yet to assess its own needs, however.

One senior cabinet minister in India said informally that Bangladesh's Awami League government had asked the Vajpayee administration to wait until national elections are held in Bangladesh. Some observers believe the project could materialize if a third country�possibly the US�enters the picture.

India also has a number of major LNG import project in the planning stages in order to boost its natural gas supplies.

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