The Hindu : Gazprom proposes shallow-water pipeline

Online edition of India's National Newspaper
Monday, Aug 12, 2002

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Gazprom proposes shallow-water pipeline

By C. Raja Mohan

NEW DELHI Aug. 11. In a new twist to the current power play on moving Iranian natural gas to India via Pakistan, Russia is coming up with an offer of its own. The Russian energy giant, Gazprom, is ready with plans to build a natural gas pipeline from Iran to India via the Pakistani coastal waters.

Russia's new energy diplomacy in the region is likely to give Moscow a political opening in Islamabad. The Gazprom energy initiative could inject

some economic content into Russia's ties with Pakistan and comes amid preparations for the visit of the Pakistan President, Pervez Musharraf, to Moscow later this year.

A joint committee of Indian and Iranian experts has been studying various options for the supply of natural gas from the South Pars field in Iran to the markets in northern and western India for some time. The committee has authorised two feasibility studies — one for a pipeline running overland through Pakistan and the other resting on the deep seabed. New Delhi has strong reservations on the first, given its security concerns about relying on an energy line coming through Pakistan. The deepwater option is far too expensive and rules itself out.

The Gazprom proposal straddles the middle ground. It wants to lay a shallow-water pipeline that runs along the Pakistani coast. It avoids the excessive costs of the deep-sea pipeline as well as address some of the security risks associated with an overland structure.

In India, key sections of the security establishment remain opposed to pipeline proposals that have anything to do with Pakistan. The Russian proposal will not overcome the argument that a pipeline running through the territorial waters of Pakistan retains Islamabad as a key actor in the project.

Like the overland option, the Russian proposal too will yield considerable revenues to Pakistan as transit fees. Media reports from Russia say Gazprom

has already embarked on consultations with Iranian and Pakistani officials on its proposal. It has also reportedly sounded out Indian companies.

Besides the Iran-Pakistan-India pipeline, Gazprom is also interested in a stake in the proposal to build a natural gas pipeline from Turkmenistan to

Pakistan via Afghanistan. Gazprom, which holds nearly one-fifth of all the world's known reserves of natural gas, is emerging as a powerhouse in the politics of building natural gas pipelines.

The logic of the market should take this pipeline too to India. But in an agreement signed earlier this year in Islamabad, the Presidents of Pakistan,

Afghanistan, and Turkmenistan have chosen to look at a proposal that will take the pipeline to Pakistan's Arabian Sea coast and export the natural gas in a liquefied form.

Of equal interest to India are the political consequences of Russia's energy diplomacy in its Western neighbourhood. Russian energy giants are now private corporations, flush with Western equity investments. In partnership with the American majors, Russian energy giants are aggressively refurbishing the industry at home and seeking opportunities around the world.

That new found activism has brought Gazprom right into Pakistan. In the last few months, there have been intensive contacts between Gazprom and the Pakistani establishment. Gazprom is also looking at reviving the cooperation between Moscow and Islamabad in the energy sector, some of it dating back to the 1960s.

Russian energy activism in Pakistan is a new reality India will have to come to terms with. Instead of raising political eyebrows at the new Russian economic focus on Pakistan, New Delhi should explore ways to convert the international interest in the trans-border energy projects into an advantage.

India, which is the largest market for natural gas in the region, has an extraordinary leverage in shaping the mega energy projects that could integrate the Gulf and Central Asia to the Indian economy.

Creative Indian diplomacy could help transform Pakistan into a bridge state between itself and the energy-rich Western neighbourhood.

A central premise of such diplomacy would be to stop treating Pakistan as a political barrier that New Delhi avoids dealing with.

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