NEW DELHI: The Indian government removed a major stumbling block in completing an intra-continent gas supply line, after its cabinet approved a deal to buy natural gas from Turkmenistan via the $7.6 billion pipeline which will pass through Afghanistan and Pakistan, reports said on Thursday.
The cabinet approved the signing of the Gas Sale and Purchase Agreement as well as the payment of a transit fee to Afghanistan and Pakistan for allowing the pipeline to pass through their territory, a Press Information Bureau of India press release read.
The 1,735-kilometre (1,078-mile) pipeline is likely to be operational by 2016, the Press Trust of India said, quoting a government official.
The source of the gas is the South Yoiotan Osman field, recently renamed Galkynysh, which has been certified by a reputed international consultant to be holding proven recoverable gas reserves of 16 trillion cubic metres, the release said.
Turkmenistan has the world's fourth-largest gas reserves and energy-hungry India and Pakistan are both eager to tap this source.
The announcement comes after New Delhi said this week it would cut purchases of Iranian oil by 11 per cent following US pressure to isolate the Islamic republic over its disputed nuclear programme. Iranian oil is one of the main fuel resources for the billion-strong population India.
Washington favours the Turkmenistan pipeline and has pressured both India and Pakistan to hold off on a pipeline deal with Tehran.
Energy-scarce India, which imports four-fifths of its crude, says it shares the US anti-nuclear proliferation goals but it views Iran as an important source of oil to feed its economy's fast-growing needs.
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@Basit: "What happened is that India caved under US pressure to cut down purchases from Iran. It’s right their in the article."
Reducing oil purchases by India is a very recent decision. Even after that decision, India will still be the largest buyer of oil from Iran.
However opting out of IPI was much earlier decision - almost 3 years back. Pakistan was going to go ahead with the IP pipeline anyway, but recently we do not see any information about that pipeline. Despite the fact that China and Russia backed out from financing the IP pipeline and NBP and OGDC also decided to disassociate itself from the project, Pak politicians were saying they would build the pipeline. Where are they now?
@O B Server: So India with all its might cannot withstand the US pressure Is Pakistan withstanding US military pressure let alone political? Dude, in international business terms emotions and religious allegiance have little strategic sense. Any day economy would prevail over nonsensical emotional rhetoric. That is Darwin's talk - One who adapts survives...
@Ravish: What happened is that India caved under US pressure to cut down purchases from Iran. It's right their in the article.
Pleases the Americans, gives everyone an impression that something is being done to meet growing energy needs also gives impression of regional cooperation. Save the celebration though. The pipeline must pass through Afghanistan where no one can vouch for its security and through Balochistan in Pakistan where security of late too has deteriorated. So is this going to happen? It is a far more expensive pipeline than IPI and fraught with too many uncertainties. Cannot see anyone risking capital or an insurance company that would extend guarnatees, India has adopted a new policy of pleasing USA, at least in form. This is one evidence,
So India with all its might cannot withstand the US pressure, IPI makes more economic sense! Both India and Pakistan should still pursue this option for their future needs, well before the the Chinese/Koreans/Japanese take advantage eventually!
@Meekal Ahmed: The only certainties in life are birth, taxes and finally death. The fact that we are all going to die, at some point in future, does not mean that we should stop planning and acting to achieve the plans.
Such deals always have the risk factor calculated. So if agreed upon by all the parties, threat of blowing off part of pipeline should not deter it from completion.
well we can even protect our pipline in baluchastan, how can we get gaurantee for afghanustan. man what a bogus project. take from persians...which is standing at your doors.
Is this not what the whole US war on terror is all about? Pull the gas pipe line via Afghanistan and Pakistan, deprive Russia of transit fees, and hence have an influence on the region. This applies to the US, not to Afghanistan, Pakistan or India. Now the question is why does all this need to be done with the presence of the US? We have shallow people from both Pk and India making foolish comments, when the reality is that both India and Pakistan are being used by the US as part of the US Asia Pivot. Still not free from the mentality left by the colonialist
@1984: "But seriously,I’ve doubts with this pipeline…What if a crazy mujahideen decides to blow himself and damage the pipeline,after it is built???" It doesn't matter which pipeline you build. That issue is going to be there.
By 2016, some of us, me included, could be dead.
Let us see how it works? Any problem if created inside the territory of other countries, then it will block the future deals. Right now, it is a good decision.
@Ravish:
Iran pipeline was delayed because of the price demands of Iran gas....Besides,since US-Israel is going to attack Iran in the near future.,...Its best to stay away from crossfire....
But seriously,I've doubts with this pipeline...What if a crazy mujahideen decides to blow himself and damage the pipeline,after it is built???
A good deal for the region on paper, but fraught with uncertainty given the badlands through which the pipeline passes. This is much more of a pragmatic political decision than one that actually ensures long term energy security.
lol What happened to your Iran pipeline? Didnt your foreign minister say what US says does not matter!
Delighted. Win win situation for all parties.
Good Development for the people of the region. Only increased economic integration among the countries of South Asian Region is the future. Preparation for war and war mentality, utilization of proxies against each other should be put asided.
Is Pakistan still going with Iranian gas line? I think things have cooled down since the threat of sanctions from US. I am sure Pakistan will not build this gas line as Chinese have pulled off as well
Good begining for both the countries.