A Tale of
Three Gas Pipelines
By Zaheer Jan
Bedminster, New Jersey
A pipeline geared to providing natural
gas to Pakistan and India couldn’t come
at a better time. After the discovery of the giant
Bombay High Oilfield in 1974, India has not made
any significant discoveries of oil or gas resources.
India’s energy needs are increasing in a
geometric progression as its economy continues
to grow rapidly. Concurrently, Pakistan’s
main energy supplier, the Sui Gas field discovered
in 1952, is also petering out.
According to a report released by the government
of Pakistan, Pakistan will face major shortages
of oil and gas by the year 2010. Pakistan’s
natural gas needs will exceed available resources
by 0.2 bcfd (billion cubic feet per day) by 2010.
The shortage will grow to 1.4 bcfd by 2015 and
2.7 bcfd by 2020. Pakistan currently produces
3.5 bcfd of natural gas, enough to meet about
half of the country’s total energy needs.
If needed supplies were not forthcoming to make
up for the shortage, the demand-supply imbalance
in the energy sector would start biting into the
growth rate, according to an Asian Development
Bank (ADB) Report.
In India, gas demand is expected to rise from
the current levels of 1.8 bcfd to 11.5 bcfd by
2010. India’s indigenous natural gas accounts
for only 8% of the energy consumption in the country.
With no new major indigenous discoveries on the
horizon, both Pakistan and India need to import
natural gas. Import of liquefied natural gas (LNG)
is one option but it is not as competitive as
building a pipeline to bring in gas from the Middle
East or Central Asia. Three competing pipeline
projects are being offered to fill the subcontinent’s
energy needs.
These include, first, a pipeline from Daulatabad
field in Turkmenistan through Afghanistan and
Pakistan to India (TAPING). Second, a pipeline
from Qatar’s North Dome through Oman and
Pakistan to India (QOPING). And, third, a pipeline
from Iran’s South Pars field through Pakistan
to India (IPING).
The 1,056 mile-long TAPING Pipeline is estimated
to cost $3.3 billion and will be capable of transporting
2.5 billion bcfd. However, the viability of this
project is questionable. While Indian gas companies
have shown interest in making investments in TAPING,
the ministry of external affairs has expressed
doubts about the availability of adequate gas
reserves.
Turkmenistan’s domestic demand for natural
gas totals 1.45-2.0 bcfd. It exports 1.0-1.3 bcfd
to Iran. The remainder is currently contracted
to Russia leaving very little for exports. Recoverable
reserves of Daulatabad gas field have still to
be established. Add to this the difficult construction
logistics posed by the need to traverse high mountains;
lack of suitable staging stations for supplies
to construction spreads; the volatile security
situation in Afghanistan and the project becomes
speculative.
The QOPING pipeline would tie Qatar into the United
Arab Emirates (UAE)’s Dolphin Project, an
integrated natural gas pipeline grid for Qatar,
UAE, and Oman. From Oman, a 720-mile subsea pipeline
connection to this grid will link Oman to Pakistan.
The project is estimated to take five years to
build at a cost of $3.5 billion. It will be able
to provide 1.6 bcfd of natural gas to Pakistan.
United Offsets Group (UOG), a UAE state-owned
corporation backing the project, signed preliminary
memorandums of understanding with Qatar, Oman,
and Pakistan. ExxonMobil also signed a preliminary
agreement for the natural gas supply from ExxonMobil’s
production capacity in the North Field. The total
project is expected to cost around $10 billion,
including costs associated with the development
of more extensive gas distribution networks in
the UAE and Oman.
IPING pipeline would comprise a 1,400-mile long
pipeline from Iran through Pakistan and onto India.
At an estimated cost of $3.7 billion, this project
is the most economically viable of the three serious
contenders. Iran boasts the world’s second
largest gas reserves of 812 trillion cu ft or
15.8% of world’s total available supply.
The entire route of IPING pipeline is overland.
It would traverse comparatively easier terrain
along Iran’s and Pakistan’s Makran
Coast, pass in the vicinity of Karachi and continue
on eastwards along the Rann of Kutch to terminate
at the industrial city of Ahmedabad in India.
While sabotage of the pipeline in the Baluchistan
Province of Pakistan is a natural concern, this
can be addressed by focusing on regional economic
development.
Before commencing work, project sponsors should
get the Baluchis to buy-into the pipeline through
offers of employment, fuel for their settlements
in the vicinity of the pipeline route and water.
All these items are in short supply along the
pipeline route and the Baluchis currently depend
upon brushwood or animal droppings to meet their
fuel needs. If the Baluchis endorse the scheme,
safety of the project is assured. Financing for
this project will not be a problem. Any number
of countries and companies will line up to provide
the needed funds.
Politically, however, the IPING
Pipeline is the most contentious project of the
three that are being floated. This is because
Iran remains on Washington’s most un-favored
nations list. Along with North Korea, it is a
member of president Bush’s “Axis of
Evil.” Any move that smacks of helping Iran’s
economy enters the realm of high politics. This
is where India and Pakistan, in pursuit of their
own economic interests, need to use their new
relationship with Washington to gain an exception.
Being the world’s only superpower,
it behooves the US to give the go ahead to the
IPING Pipeline project in the interest of promoting
regional economic integration between the Middle
East and South Asia. Such a gesture would go a
long way toward convincing world opinion that
the Bush administration is sincere when it says
it wants to pursue diplomacy over confrontation
during its second term in office.
(Zaheer Jan is an independent
energy consultant who has served as the Deputy
Chief Engineer, Transmission, for the Sui Northern
Gas Pipeline Company in Pakistan.
He has also served as Manager of Pipeline Engineering
for the $24.0 billion Alaska Natural Gas Transportation
System and as a Consultant to the State of Alaska
on TAPS Tariffs Proceedings. He currently resides
in Bedminster, New Jersey)
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