Gas Pipeline is a Dream Coming True
Kanak Mani Dixit
DELHI, June 6: Offshore Iran, in an area of the Persian Gulf known
as South Pars, lies a resource that could redirect the course
of history in South Asia, 3000 km to the east.
resource is natural gas – essentially methane – and
its import has become necessary in order to feed the demand for
energy in faraway India. And so a gas pipeline is proposed that
will traverse the Makran coast that Alexander walked during his
last, ill-fated campaign, snake across the Balochistan-Sindh desert
to Multan, and cross the Indus River to arrive finally in Rajasthan
– to quench the thirst for energy of the South Asian economic
the way, the gasline would also top up the energy needs of Pakistan,
whose own known reserves are expected to run out in a dozen years.
Till only a couple of years ago, this was a pie-in-the-sky project
to all but a few visionaries – there is no other word to
describe them – who understood how a long pipe carrying
gas could also serve as the mother of all confidence-building
the passage of natural gas through Pakistan to India, its price
set at a fair level by Tehran and its uninterrupted flow guaranteed
by Islamabad, will change the geopolitical landscape of the Subcontinent.
In one stroke, the joint stakeholding of an economic resource
will defuse the five-and-a-half decade-long India-Pakistan hostility.
Many tightly-wound bilateral problems, including the matter of
Kashmir, will suddenly become manageable.
Indeed, the geopolitics of South Asia will be transformed the moment
the New Delhi housewife is able to turn the tap for cheap natural
gas piped directly into her kitchen, finally rid of the cumbersome
red cylinders of liquid petroleum gas (LPG) that have been her
burden for decades.
more significantly, natural gas via pipeline will provide Indian
industry with a massive boost in sectors ranging from petrochemicals
to fertilizers; electric power production will increase dramatically
and a myriad of new commercial uses will be supported. Once Pakistan
begins to receive transit fees that could run to USD 600 million
yearly and Islamabad is asked to give international undertakings
not to turn off the tap in any circumstance, a threshold will
have been crossed in India-Pakistan relations.
For long, hard-headed state-centric analysts in Delhi and Islamabad
regarded the pipeline proposal as one prepared by and for romantics
who floated outside the perimeter of reality.
began to change when the Federal Cabinet in Islamabad approved
the concept of a gasline to India and President Gen Pervez Musharraf
announced that he would allow unconditional passage of Iranian
gas. The immediate reaction across the border, where the overly
cautious Brajesh Mishra was National Security Advisor to the Bharatiya
Janata Party (BJP)-led government, was skepticism fueled by the
inertia of the intelligence and foreign policy establishments.
How could Pakistan be entrusted with a resource whose blockage
would devastate a dependent Indian economy? What if Islamabad
turned off the tap? “This project is a lemon,” announced
a New Delhi heavyweight to his colleagues.
While openly there were few takers in India, there was definitely
a growing sense of anticipation. What sustained this undercurrent
of attention was a diligent reflective exercise, underway since
1995, to study the economic feasibility of transporting Iranian
gas to India with an eye to the peace dividend that this would
deliver. Very few people outside of a close-knit circle even knew
of the Balusa Group, but this ‘track two’ effort had
been laying the ground for new thinking.
up by a brother-sister émigré twosome born in India,
brought up in Pakistan and naturalized in the United States –
one an energy specialist and the other a senior foreign policy
player in Washington DC – the Balusa Group had been engaged
in the study of India-Pakistan relations, with special attention
to the possibility of natural gas linkages, for nearly a decade.
Because of this groundwork, even though Gen Musharraf’s
guarantee was snubbed in public, in private, Indian politicians,
industrialists, analysts and academics were beginning to sit up.
The realignment of regional geopolitics following the 9/11 attacks
in the United States unexpectedly threw up possibilities to jump
start the peace process, and the real breakthrough came in Islamabad
on the sidelines of the Twelfth SAARC Summit, when Gen Musharraf
gave Prime Minister Atal Behari Vajpayee an undertaking, as indicated
in a joint statement, “that he will not permit any territory
under Pakistan's control to be used to support terrorism in any
manner." This commitment paved the way for an inter-governmental
‘composite dialogue’ on a range of issues, and along
the way the ‘track two’ pipeline project suddenly
became kosher and was made part of the official ‘track one’
Pipeline gas is attractive because of its competitive price and
stable and long-term supply. The extended multinational gaslines
in operation, such as those from Siberia to Germany and from Algeria
to France, have already proven the technical, economic and political
viability of such projects and will be useful in evaluating the
has had decades of experience with its own extensive domestic
natural gas network, which branches out to all regions from the
gas fields of Balochistan and Sindh. Natural gas is the fuel of
choice of the twenty-first century: it is cheaper and cleaner
than most alternatives and it is found within easy reach in the
outlying regions of South Asia, from Burma to Turkmenistan and
the Indian and Pakistani economies are expected to grow at more
than six percent yearly for the next decade. Their hunger for
energy is already acute and their own proven gas reserves are
quite modest in relation to projected demand.
In the improved atmosphere of today, with political will evident
on both sides, the issues have been separated and the Iranian
pipeline stands alone and on its own merits. Most importantly,
the pipeline’s chaperones in New Delhi’s Ministry
of Petroleum and Natural Gas have managed to convince the political
front rank that the gasline is to be seen simply as a project
for energy security, which is vital for the economy’s growth.
are so close to a breakthrough that India’s Petroleum Secretary
SC Tripathi told reporters that if the upcoming negotiations between
Islamabad, New Delhi and Tehran went smoothly, ground could be
broken within two years and the natural gas could actually begin
to flow by October-December 2009.
Even discounting such an optimistic scenario, the peace-building
potential of the gasline is already beginning to kick in as the
three countries start to discuss the modalities of the project.
The vital need for natural gas imports is already informing rhetoric
in New Delhi and Islamabad and playing a part in modulating positions.
This trend will continue as the construction of the pipeline proceeds
and the facts of an intertwined Indian and Pakistani economy are,
literally, created on the ground.
so, the scene is set for a USD 5 billion project that would place
a pipe of 56 inches diameter and 2700 km length to carry gas under
pressure from the offshore South Pars gas field to Delhi and Gujarat,
carrying 3.2 billion cubic feet of gas a day. Initially, the flow
of natural gas will be shared 2:1 between India and Pakistan,
but this single pipeline will probably prove inadequate. The Iranian
gasline may have to be complemented by one from Turkmenistan,
and later one from Qatar or Oman. For now, the question with regard
to the gasline from Iran is no longer ‘if’, but ‘when’.
It is the coincidence of leaderships in Islamabad and New Delhi
that has delivered a permutation capable of propelling the gasline
project. Pakistan is ruled by a general president who is largely
unencumbered by political obligations and who sees the achievement
of peace with India as a crowning glory that could wipe away the
stain of autocracy.
Notable advance is expected on the pipeline front as Aiyar visits
Pakistan and Iran in early June. His trip to Islamabad from 4-7
June for discussions with Pakistan’s Minister of Petroleum
and Natural Resources, Amanullah Khan Jadoon, will be the first
time the brass tacks of the gasline will be discussed, including
transit fees, security guarantees and continuity of flow. After
a stopover in Baku in Azerbaijan to attend the 12th International
Caspian Oil and Gas Pipeline Conference, Aiyar arrives in Tehran
on 11 June to sign an agreement to buy LNG and to discuss the
pricing of the piped gas on offer.
The most obvious alternative to the Iranian gasline is the Turkmenistan-Afghanistan-Pakistan
(TAP) project. The three governments have been in consultation
on the matter since 1999, and a detailed feasibility study has
been carried out on a line that would transport gas from the Dauletabad
reserves of Turkmenistan to Multan.
the Indian interest in Iran’s natural gas has lately diverted
Pakistan’s attention and this seems to have offended the
Turkmenistani side. Recently, Islamabad's representative asked
his Ashgabat colleague to provide “gas reserves certification”,
essentially proof that the Dauletabad field had the required volume.
The Turkmenistan delegation responded by demanding that Pakistan
provide its own “firm demand projections”, and its
peeved minister is said to have retorted, “We have enough
gas to supply the world for two hundred years!”
The maturity that has suddenly emerged in the India-Pakistan relationship
is hard to comprehend given the bile that existed in its place
for much of the last decade. But while confidence-building efforts
are welcome, feel-good measures that merely emphasize the bhai-bhai
nature of the India-Pakistan interface will not be enough to peg
the relationship to an adequate threshold.
The pipeline even has the power to restrain the two countries
on the issue of Kashmir, the key yardstick by which any proposed
India-Pakistan CBM must be measured. But can the hawks and ultra-nationalists
on both sides still gather enough energy to sabotage the gasline
be sure, there is a still some distance from the hand to the mouth
when it comes to the Iranian gas pipeline. The idea has never
been this close to becoming a reality, but a number of things
could still go wrong. Most significantly, the building of the
gasline depends on the absence of accidents and incidents along
the way that could derail the larger peace effort – massive
militant attacks, assassinations and other events with potential
to fuel nationalist chauvinism and tie the hands of even the most
clear-headed president or prime minister.
less dramatic obstacles could emerge as well: Iran could ask for
too high a price for its natural gas, or Islamabad could put an
unrealistic tag on the transit. On the possibility of Pakistan
obstructing the flow of gas, Pakistani ministers have repeatedly
stated their willingness to address India's security concerns
in every way possible. Beyond this, an umbrella agreement could
bind Iran to stop the flow of gas into Pakistan if Pakistan were
to stop its flow into India.
disincentives can be introduced to keep Islamabad from playing
with the tap, and these would give India added confidence at the
initial stages. The formula that New Delhi as a customer favors
at present is to sign a bilateral agreement with Tehran by which
Iran would provide gas at the Pakistan-India border, with the
onus on Tehran to guarantee the flow through another bilateral
agreement with Islamabad.
Experts in Pakistan, however, discount the level of the threat,
particularly to the Iranian line, which would have no connection
to the source of Baloch discontent. They say that Pakistan as
the transit state would have to provide ironclad guarantees against
disruption, and that a dedicated patrolling force (perhaps the
Pakistan Army on contract) and high technology remote monitoring
would largely take care of the problem.
The greatest worry by far with regard to the future of the pipeline
proposal, however, is not the Afghan or Baloch tribesmen but the
Government of the United States of America. Currently engaged
in a jousting match with Tehran with regard to the latter’s
nuclear ambitions, the Americans have made it clear that they
eye the possible deal between the South Asians and Iran with distaste.
At a press conference on 16 March during her first trip to New
Delhi after taking office as Secretary of State, Condoleezza Rice
conceded that South Asia had growing energy needs. But then she
added, “I think that our views concerning Iran are very
well known by this time. We have communicated to the Indian government
our concerns about the gas pipeline cooperation between Iran and
The fact is that the sanctions America slapped against Iran in
1984 following the extended hostage crisis are still in place
and prohibit American companies from working with Tehran. In addition,
there is the Iran-Libya Sanctions Act of 1996, which provides
penalties even for third-country companies that work with Iran.
If they decided not to look the other way, the Americans are in
a position to lean heavily on a very US-dependent Gen Pervez Musharraf
and nudge the gasline proposal towards collapse.
Rice’s statement sent shock waves through government and
industry in India and Pakistan, but the official South Asian response
thus far has been marked by a show of bravado, one that could
well dissipate if the screws were to be tightened.
by Rice’s side at the press conference, Indian Foreign Minister
K Natwar Singh said, “We have no problems of any kind with
Iran.” Minister Mani Shankar Aiyar emphasizes the civilisational
ties India has with Iran and the importance of Iranian gas for
eradicating poverty in South Asia as a whole.
in Pakistan, Prime Minister Shaukat Aziz has said that Pakistan
will make a decision on the project based on the national interest
and nothing else, while Minister of Petroleum and Natural Resources
Amanullah Khan Jadoon has said that Pakistan needs natural gas
and will look at all options of supply, including Iran.
It is possible, however, that the Americans will not go through
with all the motions of opposing the project. One New Delhi bureaucrat
who is crossing his fingers likes to point out that Rice did not
actually raise the matter of the Iranian pipeline in her bilateral
talks with South Block officials, and what she said of US disapproval
was only in response to a question at the press conference that
the US may not want to be seen as coming out against a project
that would contribute directly to lasting India-Pakistan peace.
Or a project that would help lift the economy of all of South
Asia, the most depressed populous region in the world. Would Washington
DC be willing to put a spanner in the works of a project that
practically has a halo around it?
Overall, the consensus of analysts and bureaucrats in New Delhi
and Islamabad is that the Americans would not do such a thing,
although no one will know for sure until, as Mani Shankar Aiyar
says, the project-related agreements are signed and there for
the US to react to.
The writer is editor of Himal, a South Asian magazine published
from Nepal. This article was cut short to one-third its size published