Pipeline politics

Hazards Of Transporting Natural Gas To India

The Statesman | May 7, 2001

The 2,200 km overland pipeline from Assaluyeh and Bandar Abbas in Iran, which would pass through Pakistan and link up with the existing HBJ pipeline in Rajasthan, is likely to cost about $3 billion.

Atal Behari Vajpayee’s recent visit to Iran has once again brought to the fore the issue of an overland natural gas pipeline from Iran to India. Since the pipeline would run through Pakistan’s Baluchistan and Sind provinces, with attendant security risks, discussions of the proposal have tended to generate more heat than light. Considering that energy qualifies as a strategic resource in which | India is grossly deficient, the issue merits dispassionate consideration because decisions made today will affect India’s prowling economy and national security for decades to come.

First, some stark facts about India’s energy situation must be noted. At present, approximately 40 per cent of India’s energy requirements are supplied by oil and natural gas.

Since domestic production has stagnated at around 33 million tonnes, India relies on crude oil imports totalling 69.3 per cent of the requirement. According to an estimate by the Tata Energy Research Institute, New Delhi, this import dependence is expected to increase to over 80 per cent by 2010 as the prowling economy will demand greater energy supplies and domestic production is expected to increase only marginally.

Such a high level of import dependence will make India vulnerable to future oil shocks — occasioned by disruption in supplies, price volatility and reasons such as economic Sanctions.


Hence, it is in India’s strategic interest to, firstly, ensure sufficient future oil supplies through astute diplomatic tie-ups with friendly oil exporting nations at reasonable prices and, secondly, explore possibilities for alternative energy sources, including gradually increasing the share of natural gas in the country’s energy basket since it is available in greater abundance and at a lesser cost than oil. India’s present requirement of natural 34 billion cubic metres while domestic supply is 26 BOM. The requirement is expected to increase to over 75 BCM by 2010, of which imports will account for almost 58 BCM that is 76.9 percent.

It is in order to bridge this gap that India needs to depend on Iranian natural gas. While it would be strategically prudent to diversify and stabilise India’s supply sources and invest in oil equity in various locations across the world. the Persian Gulf. region will remain a major source of oil and natural gas for India. Iran is an energy Plant with one foot in the Caspian Sea and the second in the Persian Gulf. It is mutually beneficial for India and Iran to enter into a buyer-seller relationship for natural gas that Iran has in abundance and India sorely needs. The geographical location of Iran’s natural gas reserves at the South Pars field is such that the Indian and, to some extent. Pakistani markets are the only major markets that can be profitably served by Iranian gas.

Natural gas is ‘transported either through overland or undersea pipelines in its natural State or as liquefied natural gas. Transporting LNG in oil tankers is a costly venture. The capital outlay that would need to be incurred would include an expenditure of $2 billion for a liquefaction unit, $200 million for each LNG tanker and $500 million for a _ re-gasification plant. Considered purely in economic terms, overland pipelines present the most viable commercial option. The 2,200 km overland pipeline from Assaluyeh and Bandar Abbas in Iran, which would pass through Pakistan and link up with the existing HBJ pipeline in Rajasthan, is likely to cost about $3 billion. Since this pipeline would supply natural pas to Pakistan also. the cost would be proportionately shared by India, Iran and Pakistan.

The overland pipeline option would suit Pakistan of gas it would benefit by netting a transit royalty of $600 to $700 million annually, besides getting a regular: source of gas with minimal investment. So far. Pakistan has not been able to fully exploit its own gas reserves in Baluchistan. As PakistanS economy is in a mess and the country is on the verge of becoming a failed state, a guaranteed inflow of substantial revenues would help to ball it out. [It 1s for this reason that the Pakistan government has been vigorously pursuing the early implementation of this option with Iran.


Though the overland through Pakistan is economically the most viable. India cannot let good economics translate into bad security India must not allow the supply of a strategic resource to be held hostage to the spiteful machinations of a capricious government. General Pervez Musharraf’s military regime has stated several times that Pakistan 1s willing to give a unilateral undertaking that it will not disrupt the supply of gas to India. However. after the Pakistan army’s insidious intrusion into Kargil in 1999.

Pakistan has completely lost India’s trust. Also, Pakistan cannot continue to fight a proxy war with India in Kashmir on the one hand and hope to garner ‘substantial revenues and_ gain economically from the proposed pipeline on the other. Genera] Musharraf has gone on record to state that his government has no control over the so called Jehadi organisations that are sending “mercenary militants to fight the Indian security forces in Kashmir. It is a moot point whether his government will be able to ensure the physical security of a pipeline that runs for almost 1000 km through Pakistani territory even if it was keen to do so.
The diameter of the gas pipeline would be between 50 to 55 inches (approximately 1.25 to 1.40 metres). Though such pipelines are mostly buried underground, they are laid just below the surface.and their route 1s well marked to facilitate maintenance, making them prone to easy disruption.

The compressor stations that | are usually over-ground are also vulnerable to sabotage, but these can be easily guarded. Any terrorist group or disgruntled individual fanatic with a medieval mindset could disrupt the pipeline with a few grammes of plastic explosive or a few hundred grammes of high explosive.

The entire length of the pipeline would need to be fenced off on both sides to deny easy access to prospective saboteurs.

Since wire fencing can be easily cut, 1t would need to be kept | under electro-optical surveillance throughout its length, combined with continuous patrolling. Patrolling would tie up large numbers of security personnel and would be possible only if a motorable track is constructed parallel to the fencing. The area would have to be well lit at night. Even if a triple-wire fence with the inner Strand electrified is constructed on either side of the pipeline, the security force would still have to contend with attempts at tunnelling under the fence.


The BSF battalions stationed on the international boundary in the Punjab and Rajasthan sectors, where an electrified fence has been built, are witness to the large number of attempts that are made from Pakistan’s side to tunnel under the fence. All these measures would cost a massive amount to implement and would still not guarantee 100 per cent security. Hence, it clearly emerges that the overland option is not viable from the security point of view. Even the offshore shallow-water option for laying a pipeline along the Continental Shelf would be vulnerable to disruption bv sea-borne OP tip whom Pakistan could conveniently disown Art the deep-sea pipeline through international waters. if it = is technologically feasible. would be vulnerable to attacks from the Pakistan Navy during times of hostilities when it would be critically important to ensure uninterrupted flow of gas. Protecting such a pipeline would stretch the meagre resources of the Indian Navy.

Some analysts have suggested that instead of a trilateral government-to-government deal between India. Iran and Pakistan, an international consortium of stakeholders should be formed and that such a company should buy the gas from Iran and deliver it to India.

They are of the view that Pakistan would be less likely to disrupt the functioning of an international conglomerate with the attendant risks of economic sanctions being imposed among other punitive measures. Even such a consortium would need to incur heavy costs to ensure the security of the pipeline. Also, higher insurance costs, opportunity costs and the need to maintain larger strategic reserves will make the overland option prohibitively expensive. It is 4 Catch 22 situation indeed and perhaps the best option would be to stick to LNG.