The Hindu Business Line : Asian hydrocarbon calculus demands `fresh lines' on the gas map

Chennai April 21 The IPI (India-Pakistan-Iran) gas pipeline project is yet to take off. And there is a new country that finds mention in recent news stories: Russia.

As www2.irna.com reports in an April 13-dated story, the Prime Minister of Pakistan, Mr Shaukat Aziz, has said that the project "is under discussion and all stakeholders are moving in the right direction" and that Pakistan would welcome "Russian participation in the IPI gas pipeline project through investment in laying the pipeline".

Less than a week ago, Pakistan's Cabinet Economic Coordination Committee (ECC) had, in principle, approved the project and gas sharing formula and `made it clear Pakistan will complete this project even if India does not join the project' (www.paktribune.com) . Predictably, the US has been repeating its objection to the project.

"While the world's gas map depicts numerous gas pipelines moving across thousands of kilometres from Russia, Central Asia and the North Sea to Western Europe, hardly any pipelines move Eastwards and Southwards." Thus writes Mr Talmiz Ahmad, Director General, Indian Council of World Affairs, in an essay included in a recently published book `West Asia in Turmoil', edited by N.S. Sisodia and Ashok K. Behuria (www.academicfoundation.com) .

`Fresh lines' may have to be drawn on the gas map, predicts Mr Ahmad, because of two factors: one, the increasing Asian demand for gas; and two, the ability of Asia to transport gas economically from producers to consuming centres.

Key player

Russia is a key player in global gas. "It has 27 per cent of the world's proven reserves, followed by Iran (15 per cent) and Qatar (14 per cent)." Through transnational pipelines, Russia is the principal supplier to Western Europe. "Russia is already the largest supplier of gas to Europe; by 2030, it will meet 50 per cent of Europe's needs." Talking of transnational pipelines, Ahmad postulates that the BTC (Baku-Tbilisi-Ceyhan) oil pipeline may be "a manifestation of the US attempts to exclude Russia and Iran from the Central Asian hydrocarbon calculus".

The policy may not succeed over the medium-term, he opines, because "Central Asia will seek to reach the lucrative markets of Asia through pipelines across Russia and Iran."

Though BTC pipeline is aimed at carrying Caspian oil to Europe, there is also the possibility of Caspian oil being shipped to India from Ceyhan, in at least two ways, says the author. One, "through the Suez Canal in case of small shipments," and two, "through the newly revived Ashkelon-Eilat pipeline in Israel which, through an arrangement of double shipment from Ceyhan to Ashkelon and then from Eilat by crude carrier to India".

Mr Ahmad anticipates that India and other Asian countries would be able to obtain Caspian oil at Eilat on the Red Sea, `in case the plan for a sub-sea pipeline from Ceyhan to Israel via Turkish Cyprus would be realised'. Another proposed pipeline he discusses is the one from Alexandria to the Red Sea, which would enable India `to obtain access to oil from North Africa, particularly Algeria and Libya, which today can reach India only by going round most of the African continent'.

The Asian Gas Grid, which `envisages the setting up of a series of pipelines that will carry natural gas to the various consumption centres in East and South Asia,' is a feasible proposition, avers Mr Ahmad.

"According to current estimates, the additional pipelines required to be set up would be about 22,500 km costing about $22 billion." Estimated benefits of such a grid are $1.5 billion in the first year, and steadily growing to $55 billion by 2025.

"Transnational oil and gas pipelines are not only able to transport large quantities of hydrocarbons across hundreds, and even thousands of kilometres, but given their reach and range and the terrain they traverse, they also have significant geopolitical implications and even the ability to influence bilateral relationships and regional cooperation scenarios," says Mr Ahmad.

A happy scenario, indeed, in which instances such as the terrorist explosion of a gas pipeline east of Algeria last week would hopefully be only minor aberrations.

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