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KAUTILYA
Pipedreams To Pipelines
Iran
and Pakistan are keen on an Iran-India gas pipeline-but we are sceptical
By
Jairam Ramesh
India and Iran share many civilisational affinities. Now, the Iranians
are pushing a project that will bind the two countries closer together.
A few weeks ago, an Indian team of officials was in Teheran where the
idea of a natural gas pipeline from Iran to India came up for discussion.
But we are very reluctant since such a pipeline will have to come through
Pakistan. Iran has almost 15 per cent of the world's gas reserves, next
only to those of Russia, and is also uniquely situated to act as a transit
point for the abundant Caspian and central Asian gas.
 The
Iranians are worried about the growing Talibanisation of Pakistan and
the impact that could have on their country. As it is, they are very concerned
with Afghanistan. Their belief is that if there are projects like the
pipeline venture, Pakistan will be forced to be moderate and sensitive
to world opinion. They see greater economic interaction with neighbours
as the only way to keep religious extremists at bay in Pakistan. This
is a profound transformation in Iran's own thinking and reflects its growing
desire to rejoin the mainstream. Of course, a financially strapped Iran
could do with the extra cash from gas exports.
The pipeline
will be approximately 2,000 km long and will originate in the South Pars
field in the Persian Gulf, go through about 700-800 km of Pakistani territory
all the way to Multan to join Pakistan's gas grid and then deliver gas
at the northern or southern Rajasthan border. This gas can be used to
generate power, as boiler fuel in industry, as cooking fuel in cities
and for producing petrochemicals. The pipeline would cost about $2-3 billion
(Rs 9,000-13,500 crore) and would deliver anywhere between 60 and 100
million cubic metres of gas per day (MCMD) to India and one-third that
amount to Pakistan. The current consumption of gas in India is around
60 MCMD.
Our main
concern is that Pakistan will disrupt supplies at will and hold us to
ransom. This fear is legitimate. Pakistan will earn about $500-700 million
per year as transit fees. This is a considerable amount for a bankrupt
economy. But even assuming that it would be willing to forego this for
the nobler cause of squeezing India, there are other ways of keeping Pakistan
in check. A tripartite contract could, for example, provide for explicit
penalties to be paid by Pakistan in case of disruption of supplies. R.K.
Pachauri of the Delhi-based Tata Energy Research Institute has formulated
a detailed securities package to safeguard India's interests. What is
as noteworthy as Iran's enthusiasm for the project is the interest shown
by General Pervez Musharraf himself and the readiness with which Pakistan
has talked about "guarantees" with the Iranians without linking
the pipeline to Kashmir.
INDUS
WATERS TREATY: There is an earlier model for the gas pipeline-the
historic Indus Waters Treaty that was signed in September 1960 by Ayub
Khan and Jawaharlal Nehru. Since then, that treaty has survived two major
wars and numerous smaller conflicts. The treaty was undoubtedly amenable
to a neat technical solution but it was made possible because of American
support and because of the World Bank's sustained involvement between
1952 and 1960. The presence of the World Bank and American companies would
be essential to make the Iran-Pakistan-India gas pipeline a reality.
The overland
pipeline from Iran would serve the energy needs of north India. For peninsular
India, LNG (liquified natural gas) is the preferred option. Here, gas
is liquified at source, transported via cryogenic tankers and regassified
at the point of delivery. LNG terminals are now coming up at Dahej, Pipavav,
Jamnagar, Dabhol and Kochi on the west coast and at Ennore and Kakinada
on the east coast. We could sustain an LNG supply of about 10-12 million
tonnes per year (40-48 MCMD) which, if used entirely for power, would
generate 10,000-12,000 MW annually. The other way to transport gas across
countries is through deep-sea pipelines. In the early 1990s we were starry-eyed
about a mega-project to bring gas from Oman. Mercifully, that proposal
is now dead.
Noted Pakistani
journalist Ahmed Rashid, in his vastly engrossing book Taliban published
very recently, has described both the promise of and pitfalls in pipeline
diplomacy in our region. Today, India's participation in this new "Great
Game", as Rashid calls it, appears highly unlikely. But given a new
and bold strategic vision, we can emerge as a major player as well. What
we need to do is push for a trilateral group of non-official experts to
work out operational details for the pipeline project fully realising
that the project would be as much an exercise in politics as in economics.
The non-official dimension is important to kickstart the process because
officials very often have frozen mindsets.
(The author is with the Congress party. These are his
personal views.)
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