The 1300 km undersea pipeline from Iran, avoiding Pakistani waters, can
bring natural gas from the Persian Gulf to India at rates less than the price
of Liquefied Natural Gas available in the spot market, the firm keen on
reviving the twenty year old stalled project
Releasing a study on the Iran-India gas pipeline, former oil secretary
T.N.R. Rao said natural gas imported through a pipeline costing over 4 billion
US Dollars would cost $5-5.50 per million British thermal unit at the Indian
coast, cheaper than the rate at which some of the domestic fields supply gas.
LNG imported through ships costs about 7.50US Dollars per mmBtu. Rao, who
is the chairman of the advisory board of South Asia Gas Enterprise Pvt Ltd
(SAGE)—the firm wanting to lay the undersea line—said the pipeline can first
travel to Oman, and then onwards to Porbandar in Gujarat. “The cost of landed
gas through an undersea pipeline will be at least 2 US Dollars cheaper than
importing LNG, saving about 1 billion US Dollars annually,” the study said.
SAGE wants the government to support the pipeline and help buyers enter
into contract. The pipeline is planned to carry 31.5 million standard cubic
metres gas per day and will be built in two years from the date of necessary
approvals and a gas sale and purchase agreement (GSPA) being signed.
The subsea pipeline is being seen as an alternative to the onland
Iran-Pakistan-India pipeline. New Delhi has not been participating in talks on
the 1,036-km Iran-Pakistan-India gas pipeline since 2007 citing security and
commercial concerns but has never officially pulled out of the 7.6 billion US
Under the proposal being discussed, SAGE will lay the 1,300-km pipeline
bypassing the exclusive economic zone (EEZ) of Pakistan. Any company wanting to
buy gas from Iran can use the pipeline for rent, its director Subhodh Kumar
Jain said. “SAGE will not be buying gas from Iran. It will lead an
international consortium for building the pipeline,” he said.
Chabahar port or Kuh-e-Mubarak could serve as the origin of the pipeline
that may terminate near Porbandar in Gujarat. It can then be connected to
India’s national gas grid. Rao said gas from other nations can also be sourced
through the pipeline. Turkmenistan has a pipeline supplying gas to Iran in the
north. Iran can use the Turkmen gas for its own use and supply and equivalent
volumes to India from its offshore fields, he said.
Also, gas from Qatar and Oman can also be pumped into the proposed
pipeline. Jain said fertiliser and power sector can be main users of the
Iranian gas. “Landed price of gas in India would be competitive to spot LNG
price,” he said.
Two subsea pipelines were planned between Oman and India and Iran and Iran
and India in early 1990s. The Oman pipeline project was shelved due to costs
and possibility of pollution en route. The Iran pipeline did not take off due
to the Pakistani security factor.