IPI Pipeline Discussion Thread

IPI is more of a pipedream for india.

IPI: the Baloch perspective

Pakistan to India: Will ensure safety of IPI pipeline

Seeking to coerce India to join long- talked gas pipeline, Pakistan said on Thursday it will guarantee safety of the Iran-Pakistan-India pipeline and may give New Delhi [ Images ] an equity stake in the section passing through its territory as additional surety of safe delivery of the fuel.

With New Delhi boycotting formal talks for almost three years, Iran and Pakistan this month signed last of a series of agreements for implementing the project on bilateral basis.

Islamabad [ Images ] insists the agreements have 'in-built' mechanism to accommodate India should it decide to join the project.

"We (the State of Pakistan) will stand guarantee for safe delivery of gas (at Pakistan-India border)," Mohammed Chaudhry Ejaz, additional secretary in Pakistan's ministry of petroleum and natural Resources, told PTI in an interview.

Of the 1,035-km length of the pipeline in Pakistan, only 100-odd km would be exclusively for carrying gas to India while the rest would be transporting fuel for both Pakistan and India.

"We have up to nine hours of power outages and we need Iranian gas to bridge this rising deficit. It is in our interest that the pipeline is safe and we get the gas to generate power and fuel industries," he said.

India was widely believed to have decided not to pursue the project after the 26/11 terror attacks in Mumbai with apprehensions being expressed about terrorists holding the pipeline hostage to their demands and even cutting supplies by blowing the pipeline to hurt the interest of world's second fastest growing economy.

New Delhi, however, has not officially called it quits yet and is proposing talks with Iran to sort out impediments.

It wants to take custody of gas, that triggers payments for the fuel, only at Pakistan-India border to make Iran explicitly responsible for safe passage of gas through Pakistan.

Also, it wants gas utility GAIL (India) to take a stake in the 1,035-km pipeline section in Pakistan to make the project bankable, reduce the financing cost, ensure timely execution and ensure transparent and efficient management of the operations.

"Yes, we will more than welcome India to join the project length in Pakistan," Ejaz said when asked if Islamabad was open to India taking stake.

He said Pakistan in July 2009 signed a Gas Sale and Purchase Agreement and this month signed among other pacts a Gas Transportation Agreement, which has been notorised in Paris, provides for internationally acceptable transit arrangement for gas to be supplied to India.

"The agreements can be legally enforceable in any international court of law. The transit agreement makes us liable for safe supply of gas. We stand 100 per cent committed to safely supplying gas to India," Ejaz said.

Iran, in the GSPA, has committed to selling gas either from one of the phases of the giant South Pars offshore field or divert fuel it may import from one of its gas-rich neighbouring country.

Ejaz said like India, Pakistan has a growing energy deficit.

Pakistan faces a gas shortfall of 10.34 billion cubic feet per day (bcfd) by 2015. The indigenous gas supply is projected to fall to 2.16 billion cubic feet per day from current day supply of 4.3 bcfd. The demand for gas would stand at 12.5 bcfd by 2015.

Iran plans to export 2.2 bcfd of gas through the proposed pipeline, of which Pakistan's share would be 1.05 bcfd.

If India does not participate, Pakistan had planned to consume the entire volumes. The official said Iran has laid a large 56-inch line from Persian Gulf coast to Iran-Pakistan border with a view to accommodate supplies to both Pakistan and India.

"Considering Iran's internal consumption, they did not need such a big pipeline." Ejaz said according to pricing agreement between Iran and Pakistan, the gas will cost $7 per million British thermal unit if the crude oil price was $50 per barrel, $9.4 and $13 per mmBtu at oil rate of $70 and $100 per barrel respectively.

The estimated cost of the project was USD 1.2 billion inside Pakistan from its point of entry in Balochistan up to Nawabshah, the hub of the country's gas pipeline system. New Delhi has so far downplayed the agreements, officially only saying that it had price and security concerns which need to be addressed before it can join the project.

But, it may be preparing ground to formally quit the project. India's ties with Pakistan have dipped after Islamabad failed to act against culprits of 26/11 Mumbai terror attacks [ Images ].

It sees a serious terrorist threat to the pipeline particularly in Baluchistan province, home to a militant Islamist separatist movement.

Instead, New Delhi wants to buy gas in its liquid form that can be shipped or through a deep-sea pipeline avoiding the Pakistani territory totally.

Under the Iran-Pakistan-India pipeline proposal, a 1,100-km pipeline from the South Pars gas fields in the Persian Gulf was to be laid by Iranian firms to Iran-Pakistan border.

A 1,035-km pipeline was proposed in Pakistan to connect to the gas grid in Pakistan as also carry India's share to Pakistan-India border.

The pipeline has been on the drawing board since the mid-1990s, when Iran and India inked preliminary agreements to transport gas through Pakistan.

It was dubbed the 'peace pipeline' because of hopes it would lead to a detente between neighbours India and Pakistan.

India had major disagreements with Iran on pricing and project structure of the IPI pipeline when it broke out of talks in 2007.

Tehran has been insisting that ownership of gas would be transferred at Iran-Pakistan border while New Delhi wants it to be Pakistan-India border thereby making Iran explicitly responsible for safe delivery of gas. New Delhi is also upset with Iran's frequent changes in gas price.

Iran had originally priced its gas at $3.2 per mBtu but later in 2007 revised the rates to $4.93 per mBtu at $60 a barrel crude oil prices, which was accepted by India.

Last year, it again revised it and according to the new pricing formula, the fuel will cost New Delhi $8.3 at $60 per barrel oil price at Iran-Pakistan border.

Added to this would be a minimum of $1.1-1.2 per mmBtu towards transportation cost and transit fee that India would have to pay for wheeling the gas through Pakistan, making it the most expensive fuel in the country, they said.

Sources said Iran was not willing to commit to a supply-or-pay regime wherein it would have been held accountable for non-delivery of gas at Indian border.

It, however, wants New Delhi to commit to a strict take-or-pay clause wherein India would have to pay even if it does not take deliveries.

All it now says is that if Pakistan were to disrupt supplies to India, Iran will make a proportionate cut in the quantities to be delivered to Islamabad.

^^^^

Tell them to guarantee safety for their own people first.

Then help India keep its own citizens safe from , terrorists.

then we can see about keeping the pipe line safe.

Honestly The IPI pipeline was a fools dream.

US objects to gas pipeline deal with Iran

WASHINGTON: The United States urged Pakistan on Thursday to reconsider its deal with Iran for building a multi-billion-dollar pipeline intended to bring the much-needed natural gas to the energy starved country.
“We do not think it is the right time for doing this kind of transaction with Iran,” US Assistant Secretary of State Robert Blake told a briefing in Washington.

Mr Blake, who looks after South and Central Asian affairs at the State Department, returned this week from a trip to India, Pakistan, Afghanistan and Belgium where he discussed the current situation in South Asia with his European colleagues as well. The US official told reporters at a briefing in Washington that the issue of the Iran-Pakistan gas pipeline was raised in his meetings in Pakistan, particularly in public discussions.

“We have advised Pakistan to seek other alternatives,” he added, explaining that because of Iran’s dispute with the international community over its nuclear programme, the US opposed large investments in any Iranian project.

Pakistan and Iran signed an operational agreement for the proposed pipeline on March 16, a month after the signing was delayed because Islamabad was unable to arrange funds for the project.

The pipeline was initially mooted to carry gas from Iran to Pakistan and on to India. India withdrew from negotiations last year after signing a nuclear deal with the United States, but has kept open the option of rejoining the project at a later stage.

On Thursday, Pakistan said it would provide India with security guarantees for the pipeline from the South Pars gas complex in Iran as an incentive to join the project.

Referring to these problems, Mr Blake said the project still faced “many challenges.”

When a reporter asked if the US would also advise India not to join the pipeline project, Mr Blake said: “This is a very sensitive time in relations with Iran and we prefer that all countries avoid such transactions with Iran.”

Water Crisis

At the briefing, Pakistani journalists were particularly concerned about a potentially explosive dispute between India and Pakistan over water and they put several questions to the US official on this issue.

Mr Blake said the US would not get involved “in bilateral issues” between India and Pakistan. “We think the World Bank is the right place” for resolving such disputes.

The United States, however, will help both countries in developing their water resources.

On Thursday, an influential US newspaper — Wall Street Journal — reported that the water feud between India and Pakistan was threatening to derail peace talks between the two neighbours.

The countries have harmoniously shared the waters of the Indus River for decades. A 50-year-old treaty regulating access to water from the river and its tributaries has been viewed as a bright spot for India and Pakistan.

Now, Pakistan complains that India is hogging water upstream, which is hurting Pakistani farmers downstream. Pakistani officials say they will soon begin formal arbitration over a proposed Indian dam.

At a meeting that started on Sunday, Pakistan raised objections to new Indian dam projects on the Indus River and asked for satellite monitoring of river flows.

India denies it is violating the treaty. New Delhi blames Pakistan’s water shortage on changing weather patterns and the country’s poor water management.

The latest dispute revolves around India’s plans to build a 330-megawatt hydroelectric power project on the Kishenganga River, a tributary of the Indus. India says it is well within its rights to build the dam.

Pakistan says New Delhi’s plans to divert the course of the river will reduce its flow by a third in the winter. That would make it unfeasible for Pakistan to move ahead with its own plans for a hydroelectric dam downstream.

Pakistan wants to put the Kishenganga project before an arbitration panel—the first time that mechanism of the treaty will have been used.

Mr Blake also referred to this panel, set up under the Indus Water Treaty, and hoped that they would be able to resolve this dispute through arbitration as they did in the past.

He told the briefing that the water dispute came up at every meeting he had in Pakistan.

Mr Blake said that both India and Pakistan were facing acute water shortages because of their rapidly increasing populations and expanding economies.

“So the water issue is a real challenge for both.”

Pakistan, he said, needed to change it irrigation practices and offered US assistance to help overcome the problem.

Anti-India Militant Groups:

Mr Blake called on Pakistan to curb anti-India militants, praising Islamabad’s recent efforts against extremism but saying it could do more to improve ties with New Delhi, adds AFP

Blake hailed the “enormous” progress in Pakistan in fighting Muslim extremists, pointing to its offensives against Taliban in its restive northwest and recent arrests of militant leaders.

“I think one can argue there is a lot of important progress that has been made but we think there also needs to be progress against these Punjab-based groups,” Blake told reporters.

He was referring to groups such as Lashkar-e-Taiba and Jaish-e-Moham-med.

Blake said that Punjab-based militants “are targeting Pakistan as well,” pointing to attacks in Lahore including a deadly 2009 ambush on Sri Lanka’s visiting cricket team.

Blake said he also relayed to Pakistan the concerns of New Delhi that militants were infiltrating India to carry out attacks.

“I reminded them that from 2004 to 2007 both of those countries made quite important progress in their bilateral relations, and that progress was made possible in part by the significant efforts the government of Pakistan made at the time to stop cross-border infiltration,” he said.

New Delhi, April 3 (IANS) Denying any US pressure on its ties with Iran, India has decided to nominate its ambassador to participate in a meet on nuclear disarmament in Tehran and stressed that it has not shut its door on the pipeline project.
Four days after the Nuclear Security Summit in the US, Iran, under escalating international pressure over its nuclear programme, will be hosting a two-day conference April 17 on nuclear disarmament and has sought India’s support for this initiative.

India’s Ambassador to Iran Sanjay Singh will participate in the April 17-18 Tehran meet on nuclear disarmament entitled “Nuclear Energy for All, Nuclear Weapon for None.”

Keen to keep its bilateral ties on track, India has not withdrawn from the proposed $7.5 billion tri-nation pipeline, well-placed sources Saturday said.

“We haven’t shut the door on dialogue. Besides pricing and security issues, the volatile situation in Pakistan also has a bearing on the project,” the source said.

Last month, Iran and Pakistan struck a bilateral pact on the pipeline project, but left the door open for India to join in at a later stage.

Underlining India’s civilisational ties with Iran, the sources pointed out that Tehran is important for New Delhi not just for energy but also for strategic reasons in Afghanistan.

India, Iran and Russia had cooperated closely in propping up the Northern Alliance after the US-led ouster of the Taliban regime late 2001.

The source also denied any American pressure on India to scale down its ties with Iran, saying New Delhi’s ties with Tehran stand independently of its relations with other countries.

Alluding to additional sanctions contemplated by the five permanent members of the UN Security Council and Germany against the Iranian regime in the UN Security Council, the source said India has always advocated dialogue to resolve the issue and pressed Tehran to adhere to its obligations under the Nuclear Non-Proliferation Treaty (NPT).

In November last year, India had backed an international resolution for the third time against Iran over its nuclear programme, but qualified it by saying it was opposed to “a renewed punitive approach or sanctions” and stressed the need for “keeping doors open for dialogue”.

http://www.thaindian.com/newsportal/...100343068.html

Vinod, For US $ 2 billion it is a very small price for China to keep Pakistan at our throat. Remember the point is not that the Chinese need this Gas, they have signed deals wth the Russians for the Siberian gas, they have signed agreements in the CAR for a gas pipeline. IMO this money is for the Pakistani's to construct the pipeline. This is the only way the IP pipeline will be commercially viable.

Read this guys
http://www.dailytimes.com.pk/default...7-3-2010_pg5_8

What interesting is that
1. even site survey and documentation has not started.
2. work will begin AFTER 4 years.
3. project cost as estimated now is 4 billion USD . After 4 years this will go up.

So far only the gas supply and purchase agree ment ie price has been agreed to between
Iran and Pakistan.

Now the difficult part of the task ie design ,equipment, technology and money is all dependent on
China.
Baloochistan is simmering with discontent .So there will be "trouble"

Pakistan is so severely in debt and chinese are in no mood for charity.
So reports of chinese assistance are just being manufactured by pakistan government.

Trilateral gas pipeline talks planned for next month in Tehraneora



New Delhi -- India has proposed fresh trilateral talks to be held in Tehran next month and is optimistic that the proposal on the Iran-Pakistan-India natural gas pipeline will be accepted. ''We had initiated the trilateral talks in 2007 among the three governments and such discussions are ongoing,'' Minister for Petroleum and Natural Gas Murli Deora told reporters at the Consulate General of India in New York, Doordarshan News Website reported.

A bilateral agreement was signed between Iran and Pakistan earlier this year on the $ 7.5 billion gas pipeline, a venture in which New Delhi has shown interest for obtaining gas.

Earlier, India proposed dialogue with Iran to discuss impediments in implementation of the Iran-Pakistan-India (IPI) gas pipeline project. Petroleum Minister Murli Deora on March 31 met Iran's Deputy Minister for International Affairs H Noghrehkar Shirazi on the sidelines of the 12th International Energy Forum in Cancun, Mexico to propose bilateral talks in May.

The pipeline has been on the drawing board since the mid-1990s, when Iran and India inked preliminary agreements to transport gas through Pakistan. It was dubbed the 'Peace Pipeline' because of hopes it would lead to a detente between neighbours India and Pakistan.

Does Iran thinks, pakistan has money to pay for gas?

http://www.hindustantimes.com/Iran-g...e1-710320.aspx

Not sure about the accuracy of this article
-----

India considering return to Iranian gas - Tehran Times

This is from press tv .
But still, is this correct??

India voices willingness to resume ‘IPI’ gas pipeline negotiations

I thought IPI is done deal, no more going back on ipi. Seems india is still doing flip flops on ipi. Or is this some message being sent to china??


Only good thing is this

IPI Pipeline is ironically a pipe dream.

@Singh why are we again bringing the issue with iranians again?? What about TAPI pipeline, can the yanks really gurantee us oil/gas from turkmenistan in any scenario?

TAPI Pipeline was explored to assuage Americans. The problems with TAPI and IPI both is the P in the middle.

For IPI we need a few things
1. Good rates to offset any potential adverse US economic action or catastrophic change in Iran and/or Pakistan. We are not going to pay market prices for Iranian Gas.
2. Guarantees from Pakistan that it will provide security. Pakistan cannot be trusted either.
3. Paying only for the amount we consume. If Pakistan stops flow, we don't pay for Gas we don't consume.