India may not pursue the $7.4 billion (Rs 33,374 crore) Iran-Pakistan-India (IPI) pipeline project because of possible sanctions state-owned firms involved in it could attract from the US if they do business?with?Iran, and may instead push ahead on the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline.
“We are most interested in pursuing the project. But the project has to be implemented by public limited companies [GAIL (India) Ltd and Indian Oil Corp. Ltd, or IOC] from India who have to function in an international environment. I am given to understand that if they were to move forward they are likely to face sanctions. So this decision has to be taken by them,” India’s petroleum secretary S. Sundareshan said in a recent interview.
A GAIL spokesperson in an email response said: “Legal advice was sought in November 2010.” He denied that a decision on the pipeline has been taken and added that, “no meeting on the IPI pipeline project has taken place for the last two years.”
A senior IOC executive who did not want to be identified said: “This is a very sensitive issue. Indian government’s policies and decisions will prevail.”
Iran and Pakistan have decided to go ahead with the project without India, and are trying to get China to partner with them.
Iran had earlier alleged that India was delaying decisions with respect to Iran because of “pressure” from the US. While talks on the 2,300km multi-billion-dollar IPI pipeline started in 1995, India joined the TAPI project in April 2008 and attended the first TAPI summit held at Ashgabat, Turkmenistan, this month. The four countries signed the intergovernmental and the gas pipeline framework agreements. The last trilateral meeting on the IPI pipeline involving Iran, Pakistan and India was held in July 2007.
Iran has the world’s second largest oil and natural gas reserves, but several Indian projects in that country are in limbo. India is the world’s fifth largest energy consumer and imports 80% of its needs, accounting for 3.5% of global consumption.
While the US has welcomed the TAPI pipeline, which is likely to be commissioned by 2016, it is against the IPI pipeline. Construction on the TAPI project, which has a capacity of carrying 90 million cu. m per day (mcmd) of gas from Turkmenistan’s Gunorta Yoloten-Osman field, is expected to start in 2012. Of this, 38 mcmd is planned for India.
The US embassy in New Delhi reiterated that country’s stand on Iran in an email: “Our concerns with Iran—namely the lack of transparency in its nuclear programme, as well as its consistent disregard for human rights—remain. We continue to work with the international community to address these concerns...”
Several countries, led by the US, have accused Tehran of seeking to build nuclear weapons. They are demanding a freeze of its uranium enrichment activity—a key step towards developing an atomic arsenal. Iran denies its nuclear programme has military uses. The sanctions imposed against that country by the US are aimed at choking off Iran’s access to imports of refined petroleum products such as petrol and jet fuel, and curbing its access to the international banking system.
The Indian government had earlier expressed fears that fresh international sanctions against Iran could hurt India’s pursuit of energy security. The strictures, “with their restrictions on investment by third countries in Iran’s energy sector, can have a direct and adverse impact on Indian companies and, more importantly, on our energy security and our attempts to meet the development needs of our people”, India’s foreign secretary Nirupama Rao had said in July.