Accessibility links

Breaking News

Iran: Tehran Pushing Pipeline Plans For India, Pakistan

An Iranian plan to pipe gas to India and Pakistan faces tough political challenges, as the two countries trade charges over a terrorist attack last week. But Tehran is trying to give both nations a stake in the venture to assure their energy security.

Boston, 18 December 2001 (RFE/RL) -- Iran is pushing ahead with plans for a gas pipeline to join Pakistan and India, despite their deep political divide.

The effort to turn Iran's huge gas reserves into exports for the region involves the interests of over a dozen countries in Asia and the West.

Despite the obstacles, Iran's energy supplies and the demands of South Asia could have the makings of a match. Iran in second only to Russia in gas reserves, while India's gas consumption will nearly triple by 2025, according to estimates cited by the Associated Press.

Last week, the "Oil & Gas Journal" reported that Iran has chosen firms from Australia and Italy to conduct feasibility studies for pipeline projects that could cost up to $6 billion. Under one plan, a 2,670-kilometer line would run overland through Pakistan to India, delivering Iranian gas to both countries.

Last March, the "Middle East Economic Digest" reported that Italy's Saipem company had conducted a study of an underwater line to India that would bypass Pakistan at a cost of $3.3 billion, potentially saving $2 billion over a Pakistani route using liquefied natural gas. Saipem is an affiliate of the Italian oil company ENI.

The "Oil & Gas Journal" said a study is being conducted by Australian consultant BHP Kinhill and Italy's Snamprogetti, a construction subsidiary of ENI. While Australian and Italian interests are in the lead on the export initiatives, they have been joined by a host of other Western companies.

Last month, Philip Aiken, president of BHP Billiton Petroleum, told a London business meeting that his firm is a member of a nine-company consortium studying outlets for Iran's giant South Pars gas field over the next 25 years. The involvement of European companies from countries including Britain and France is a measure of the interest in Iran's potential, despite past opposition from the United States.

Speaking in New Delhi on 4 December, Iranian Deputy Foreign Minister Mohammad Hossein Adeli said the latest studies will be ready next spring and suggested a preference for the overland route to India.

Adeli said the line will run 1,100 kilometers from Assaluyeh in southern Iran, and an additional 1,150 kilometers across Pakistani and Indian territory.

Assaluyeh is the site of a gas treatment plant built by the French oil firm TotalFinaElf. Gas from the South Pars field in the Persian Gulf started flowing to the plant for the first time over the weekend, the "Iran News" reported.

Although talks on Iranian gas exports to India go back a decade, the latest moves mark an acceleration of the effort. On 1 December, Foreign Minister Kamal Kharrazi announced that a joint technical committee would be formed with Pakistan to advance the pipeline project. A similar Iranian committee with India already exists.

The push coincides with the conflict in Afghanistan, which could spur action for two reasons at once. While the ouster of the Taliban removes an irritant in ties between Iran and Pakistan, it also raises the chance that a unified Afghanistan could provide a competitive gas route from Turkmenistan.

While a long-stalled project for a pipeline from Turkmenistan to Pakistan may be far in the future, Iran has reason to press ahead before its own plan is eclipsed. But like many energy deals in the region, the Iranian proposals are loaded down with political concerns.

Even without Afghanistan's crises, the deep and historic mistrust between India and Pakistan has been a hurdle for both the Iranian and Turkmen plans.

Since independence in 1947, the two South Asian neighbors have fought three wars, making common interest elusive despite their energy needs. But at the same time, the enormous investment needed for either pipeline may be hard to justify unless both Pakistan and India can be reached.

In the past year, Pakistan has given Iran repeated assurances that it would not interfere with gas flows to India, while New Delhi has insisted on a direct route for its energy security.

Iran's latest formula for the overland line is designed to build confidence and bridge the divide. Under the plan, 30 percent of the gas would be destined for Pakistan and 70 percent for India, giving both countries a stake in maintaining the flow. Capital spending for the project would be shared with Iran taking 48 percent, Pakistan 32 percent, and India 20 percent.

But while the flow of gas from South Pars may be a step forward, the events of the past week must be seen as a step back for cooperation between the world's two newest nuclear powers.

On 13 December, five terrorist gunmen broke into the Parliament House in New Delhi, leaving 13 dead in a suicide attack. India blamed militant groups in Pakistan that have sought to drive Indian forces from disputed Kashmir. On 16 December, Indian police charged that the two groups, Jaish-e-Mohammad and Lashkar-e-Tayyaba, were acting under direction from Pakistani intelligence.

Pakistan's president, General Pervez Musharraf, has said there is no proof and warned India against any retaliatory action. Speaking on 16 December in Washington, U.S. Secretary of State Colin Powell said the situation "has the potential of becoming very dangerous."

Powell added, "What we don't want to do is see the rhetoric get so ratcheted up that the rhetoric is then followed by action which lets the whole situation go out of control."

In such an atmosphere, it will be impossible to pursue any plan calling for cooperation, unless the countries can agree on mutual interests and guarantees.