India and Turkmenistan Discuss Undersea Alternatives to Pipeline from Iran's South Pars Gas Field

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Researched by Industrial Info Resources (Sugar Land, Texas)--Discussions held between India and Turkmenistan are understood to have included plans for possible alternatives to the Iran-favored pipeline from the South Pars gas field running through Pakistan to markets in the east. A strong alternative discussed is a deepwater undersea pipeline carrying gas from Turkmenistan, together with the Turkmenistan-Afghanistan-Pakistan-India (TAPI) project.

Iran has several plans to export gas via pipelines to Europe and other Gulf states in addition to southern Asia, but political considerations have often stood in the way of developments. Plans for liquefied natural gas (LNG) projects have come to a halt in Iran because of sanctions, leaving Iran to push gas exports through pipelines.

The proposal for an undersea pipeline envisages gas piped from Turkmenistan to northern Iran, with a swapping arrangement carrying gas from the south of Iran to India, using the previously proposed South Asia Gas Enterprise (SAGE) pipeline complex.

The SAGE project is built around a network of gas pipelines gathering gas from the Middle East and culminating in a collection point in Oman, from where the gas would be piped more than 1,000 kilometers undersea to India. In the mid-1990s, the project was deemed to be extremely difficult because of the extreme depth of the water (about 3,500 meters) and the non-availability of technology for both construction and laying of the pipeline at these depths.

Recent developments in pipe-manufacturing processes, vessels capable of laying pipeline in deep water and deep-water repair facilities now make the project feasible to the extent that SAGE is understood to have signed a memorandum of understanding with state-owned National Iranian Oil Company (Tehran, Iran) to develop gas imports using this route.

In addition, GAIL (India) Limited (BSE:532155) (New Delhi) is also reported to have entered into a principles-of-cooperation agreement regarding the proposed concept.

According to estimates provided by SAGE in a presentation in March 2008, the project will be able to supply about 31.5 million cubic meters of gas each day through a single line, with additional lines to be subsequently installed as required. SAGE points out that gas markets in the west of India are no farther away from the Middle East gas reserves than the markets in the east are from the gas reserves located off India's eastern coast.

The proposed SAGE undersea pipeline project would have a detrimental effect on the previously discussed Iran-Pakistan-India (IPI) pipeline project. The IPI project was first discussed in 1989 and proposed a 2,775-kilometer pipeline running through Pakistan from Iran to New Delhi. The pipeline has been strongly opposed by the U.S., but India has pressed for the project to show that it has an independent foreign policy independent of U.S. influence.

Agreement on the IPI project was close before terrorist attacks in Mumbai in November 2008 caused relations between India and Pakistan to deteriorate, leading India to suggest that the only secure route for the pipeline is offshore along the southern coast of Pakistan. Now that the SAGE project is technically feasible, the IPI project could become irrelevant.

A number of proposed Iranian gas pipeline projects have been postponed indefinitely in recent years. An example of this is the pipeline between Iran and Bahrain, designed to carry 1 billion cubic meters from Iran each year. The project was shelved at the end of 2008, following deteriorating relations between the two countries.

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