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Undersea Iran-Oman-India pipeline beneficial to all participants

Undersea Iran-Oman-India pipeline beneficial to all participants

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Date: 9 December 2015 12:47

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By Umid Niayesh- Trend:

A senior energy expert says Iran-Oman-India pipeline would fundamentally alter the energy architecture of the Arabian Sea to the benefit of each of the principals involved.

Iran is negotiating with India to lay a $4.5 billion undersea gas pipeline from Persian Gulf to Gujarat, India.

"Negotiations are under serious consideration" for a pipeline from Iranian coast via Oman Sea and Indian Ocean to Gujarat, National Iranian Gas Export Co (NIGEC) Managing Director Alireza Kameli said at the World Energy Policy Summit in India, Press Trust of India reported on Dec.7.

The pipeline is planned to carry 31.5 million standard cubic meters 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, he said.

Micha'el Tanchum is a nonresident Senior Fellow at the Eurasian Energy Futures Initiative and Global Energy Center at The Atlantic Council told Trend Dec.8 that For India, a dedicated pipeline for Persian Gulf natural gas imports would be an important geopolitical gain in its competition with China. "In addition to the claimed commercial advantage for India of undersea piped gas imports over surface-borne LNG imports, New Delhi will have a strong political will to actualize Iranian piped exports via an Iran-Oman-India pipeline. In the long term, Indo-Iranian energy cooperation could facilitate the creation of an alternative Europe-to-Asia corridor to China's OBOR centered on the western Indian Ocean".

He added that the same pipeline system could also be used for the transport of natural gas from Qatar to India, thereby creating a nexus of Persian Gulf natural gas suppliers for one of the world’s fastest-growing economies. "The potential would exist for Turkmenistan to export its gas to India across Iran and via the undersea pipeline, possibly providing New Delhi and Ashgabat an alternative delivery route to Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline".

According to Tanchum, For Oman, the pipeline would significantly advance Oman's ambitions to be a regional gas hub.

Coming to Tehran, he said that For Iran, the pipeline provides a secure delivery route and significant market share in India, now the fastest growing major economy. "It will also create an opportunity to expand its export relations with other countries in the Persian Gulf. However, Iran needs to exercise careful planning to ensure that it diversifies the places it occupies in the value chain. The new petrochemical complex being developed in Chabahar is an important step in this direction. Through undersea piped gas, LNG and Petrochemical exports to Asia, and expanded bunkering services, Iran will become a major actor in the energy architecture of the Indian Ocean".

Iran has increased gas production more than 100 million cubic meters per day to about 700 mcm/d since 2013 and plans to increase this volume to above 1200 mcm/d by early 2020.

Feasibility

Coming to the feasibility of Iran-Oman-India pipeline, Tanchum said that all the parties involve remain confident about the feasibility. The project advanced in earnest

after the February 2015 agreement concluded between India’s External

Affairs Minister Sushma Swaraj and Oman’s Foreign Minister Yusuf bin Alawi bin Abdallah.

"Technological advancements increasing the project’s feasibility were cited by the Ministers as the factor motivating the agreement. The New Delhi-based South Asia Gas Enterprise (SAGE) conducted a feasibility study analyzing the transport of natural gas from Iran’s South Pars field via Oman to India’s west coast based on a 31 mcm/d volume, the exact volume India expected to receive from Iran before withdrawing from India-Pakistan-Iran pipeline. Presumably, the ministers were convinced by this study", he said.

Tanchum said that in addition, SAGE's rival Fox Petroleum, which also submitted a proposal to construct the pipeline, have asserted that gas imports to India via an undersea pipeline from Oman would be less expensive than India’s LNG imports by $1.5-2 per million British thermal units. "Despite the added challenge of having to circumnavigate Pakistan's extended EEZ, the project appears to remain feasible," the senior fellow at the Eurasian Energy Futures Initiative and Global Energy Center at The Atlantic Council added.

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