Friday, Nov 28, 2014

The great Game Folio: Russian Pipeline

India would like to import a lot more and the idea of building a direct pipeline from Russia, therefore, has become an object of political interest in Delhi and Moscow. India would like to import a lot more and the idea of building a direct pipeline from Russia, therefore, has become an object of political interest in Delhi and Moscow.
Written by C Raja Mohan | Posted: July 16, 2014 12:17 am

RUSSIAN PIPELINE

The idea of an overland pipeline bringing hydrocarbons from Russia to India has been around for a while. Mooted under UPA rule, the proposal is gaining some traction with the NDA government. New Delhi and Moscow are looking for some big new projects to boost their stagnant commercial ties. Annual bilateral trade now hovers below a paltry $15 billion. Given the massive complementarities in the energy sector, the two sides rightly focus on making this the centrepiece of a stronger economic partnership in future.

Talks on Russian atomic reactor exports are making slow progress amidst the continuing differences over the application of India’s nuclear liability act. As India’s demand for oil and natural gas grows, the hydrocarbon sector presents itself as a major strategic opportunity. India already has $5bn invested in the Russian petroleum sector. India also imports crude oil worth nearly $200 million every year.

India would like to import a lot more and the idea of building a direct pipeline from Russia, therefore, has become an object of political interest in Delhi and Moscow. Further impetus for the project has come from a recent Russian deal with China to export natural gas worth $400bn over a 30-year period via a new pipeline. The idea is generating some excitement and is expected to figure in the bilateral talks between Prime Minister Narendra Modi and Russian President Vladimir Putin on the margins of the BRICS summit in Brazil.

LUCKLESS INDIA

It is easy drawing pipeline routes on the map. India knows that building them on the ground is not. For none of the pipeline projects that India has debated in the last two decades has taken off for reasons of costs, geopolitical and financial. There have been many proposals to build underwater pipelines from the Gulf to India; but cost considerations have put them on hold. Overland pipeline projects have been grounded mainly for geopolitical reasons. The plan to build the

Iran-Pakistan-India (IPI) pipeline has run into strong opposition from the United States, which remains opposed to any projects  involving Tehran.

India, Pakistan and Afghanistan have spent much time negotiating the TAPI pipeline that would have brought natural gas from Turkmenistan into the subcontinent. Given the security problems in the Af-Pak region, it has been hard selling the project to international bankers.

There was a plan to build a natural gas pipeline between Myanmar and India through Bangladesh. But the inability of Delhi and Dhaka to act fast saw Myanmar deciding to sell the gas to China. Beijing moved rapidly to build a twin pipeline system from the Bay of Bengal coast to the Yunnan continued…

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