Iran-Oman-India pipeline

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Modi and the Sino-Indian Game for Iranian Gas
The Indian prime minister makes his opening move in a mini “Great Game.”

Indian Prime Minister Narendra Modi’s recent visit to Turkmenistan as part of his tour of the five Central Asian republics was a critical opportunity for New Delhi to advance the Turkmenistan-Afghanistan-Pakistan India pipeline (TAPI), slated to transport to million cubic meters per day of natural gas to India, helping the world’s fastest growing major economy meet its own skyrocketing demand.

However, instead of announcing a major Indian initiative to expedite the selection of TAPI’s consortium leader, the hurdle that has stymied TAPI’s implementation, Modi suggested that an alternative land-sea route via Iran for transporting Turkmen gas should also be considered. Modi’s high profile plug for an Iran-Oman-India subsea pipeline by proposing its use for Turkmen gas exports was a savvy diplomatic gesture aimed at Beijing’s April 2015 agreement with Islamabad to construct most of Pakistan’s portion of the Iran-Pakistan (IP) pipeline. Coming just days before the Iran and the P5+1 announced the Iran nuclear deal, the suggestion was the prime minister’s opening shot in a Sino-Indian mini “Great Game” to orient the flow of gas exports from a post-sanctions Iran.

The Iran-Pakistan (IP) pipeline was originally conceived in 1995 as the Iran-Pakistan-India (IPI) pipeline, a project that would have delivered 31 million cubic meters per day (mcm/d) of Iranian gas to India. Under Washington’s pressure after the 2008 U.S.-India Civil Nuclear agreement, New Delhi withdrew from the project in 2009. Meanwhile, China revived the IP pipeline in the wake of the April 2, 2015 Framework Agreement between Iran and the P5+1 nations over Iran’s nuclear program. On April 20, 2015, Beijing signed an agreement with Islamabad to construct a pipeline from Pakistan’s Chinese-built Gwadar port to Nawabshah, where it can join Pakistan’s domestic gas distribution network. A boon for energy-starved Pakistan, the IP pipeline will deliver enough gas from Iran’s massive South Pars field to generate 4,500MW of electricity, covering Pakistan’s current shortfall in power production.

For Beijing, the IP pipeline is an energy geopolitics power move, advancing China’s Silk Road Economic Belt and Maritime Silk Road initiatives (collectively termed “One Belt, One Road,” or OBOR). The IP pipeline agreement is part of a $46 billion infrastructure package to establish the China-Pakistan Economic Corridor (CPEC), extending from the Chinese-administered Gwadar port on Pakistan’s Indian Ocean coast to China’s westernmost city Kashgar (Kashi) in Xinjiang. A subsidiary of the state-owned China National Petroleum Corporation will construct the pipeline financed by a $2 billion Chinese loan, covering 85 percent of the construction cost. Iran has already built its section of the pipeline to the Pakistani border. Pakistan has promised to construct the remaining 80 km of the pipeline from Gwadar to the Iranian border once sanctions end.

Critical for Beijing, the IP pipeline creates the potential to import Iranian gas via Pakistan through its extension to China’s vast northwestern province of Xinjiang. Home to the restive Uighur minority, Beijing needs reliable gas supplies to rapidly develop the province to secure its integration within China and to establish it as China’s gateway to Central Asia. Xinjiang is one of the principal launching points for China’s OBOR initiative.

India’s answer to China’s OBOR is New Delhi’s International North-South Transit Corridor (INSTC) initiative, centered on India’s construction of a deep-water port in the Iranian coastal town Chabahar, approximately 72 km east of Gwadar. The Chabahar port will serve as INSTC’s Indian Ocean outlet. With India’s overland access to Central Asia blocked by Pakistan and China, Chabahar and the INSTC running northward through Iran and Afghanistan will provide India vital access to Central Asian markets, enabling India to effectively compete with China. India has had difficulty establishing a position in Central Asian oil and gas production, in part, because of its lack of direct access to the region.

With Beijing having already invested more than $50 billion in Central Asian infrastructure projects, India’s INSTC is the tortoise to China’s OBOR hare. While the INSTC is a potential, long-term Eurasian game-changer, an Iran-Oman-India line would immediately and fundamentally alter the pattern of energy exports in the Arabian Sea and with it the geopolitics of the Indian Ocean.

The initiative for an Iran-Oman-India pipeline can also be traced back to another transformational Indian prime minister, the late P. V. Narasimha Rao who raised the idea during his 1993 visit to Oman’s capital Muscat. Twenty-two years later under India’s current change agent prime minister, negotiations between New Delhi and Muscat concerning the pipeline restarted in earnest. In February 2015, India’s External Affairs Minister and Oman’s Foreign Minister concluded an agreement supporting the project, citing technological advancements that increase the project’s feasibility as the motivating factor for the agreement. However, the prospect that an Oman-India pipeline would transport natural gas from a post-sanctions Iran was also a compelling factor.

When the New Delhi-based South Asia Gas Enterprise (SAGE) conducted its study, SAGE analyzed the feasibility of transporting natural gas from Iran’s South Pars field via Oman to India’s west coast. Moreover, the feasibility study was based on a volume of 31 million cubic meters per day, the exact volume India was slated to receive from Iran before it withdrew from India-Pakistan-Iran pipeline.

A week prior to the Iran-P5+1 Framework Agreement, Fox Petroleum issued a proposal for the construction of the Oman-India Multi-Purpose Pipeline (OIMPP), a deep water pipeline system to transport Iranian natural gas via Oman to a receiving terminal on the coast of India’s Gujarat state. Costing an estimated $5.6 billion, the 1,600 km pipeline would transport 8 trillion cubic meters over a 20 year period. Citing recent advances in deep-sea pipeline technology, Fox Petroleum’s chairman asserted that gas imports to India via OIMPP would be less expensive than India’s LNG imports by $1.5-2 per million BTU. The same pipeline system could also be used to transport natural gas from Qatar to India, thereby creating a nexus of Persian Gulf natural gas suppliers oriented toward supplying the world’s fast growing major economy. And, as Modi intimated in Ashgabat the potential would even exist for Turkmenistan to export its gas to India across Iran and via the undersea pipeline.

With Beijing’s strong head start in Central Asia, a post-sanctions Iran is New Delhi’s key to becoming a major player in Eurasia. Modi’s Central Asia tour and his public promotion of an Iran-Oman-India pipeline signal a new round in the Sino-Indian mini Great Game. To advance, New Delhi will have to match Modi’s diplomacy with major investments in energy and transportation infrastructure. The TAPI pipeline and an Oman-India pipeline are the places to start.

Micha’el Tanchum is a Senior Fellow with the Eurasian Energy Futures Initiative at the Atlantic Council

http://thediplomat.com/2015/07/modi-and-the-sino-indian-game-for-iranian-gas/

 

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Iran deal bodes well for Oman-India pipeline project
By Conrad Prabhu — MUSCAT: The historic breakthrough announced by world powers at the weekend in clinching a framework agreement with Iran over its nuclear programme could have hugely beneficial economic implications for the Sultanate of Oman once international sanctions are eventually lifted, say experts. A conclusive deal, targeted by the end of June, has the potential to impart strong impetus to bilateral trade and cooperation across an array of economic sectors, notably energy, petrochemicals, heavy industry, mining and shipping and transport, among other spheres.

Anticipated to make good headway, however, is the Oman-Iran gas supply agreement that, energy experts believe, has the potential to position the Sultanate as the hub of a so-called ‘corridor’ supplying natural gas to the Indian sub-continent via the Arabian Sea. Under an MoU signed by the two countries in August 2013, Oman has committed to importing annually around 10 billion cubic metres of Iranian gas for a period of 25 years in a deal estimated at $60 billion.

Since it was first floated in the late-1990s, a proposal for a deep-sea pipeline from Oman to India’s west coast had languished largely because of the astronomical costs involved and the unprecedented technical nature of the undertaking.

But with deep-sea pipeline technology having since demonstrably proven the viable of such ventures, coupled with the attendant benefits associated with piped gas supply, prospects for a pipeline tapping into gas-rich producers of the Gulf, Middle East and potentially Central Asia as well, have been revived, of late.

In a shot in the arm for proponents of the deepwater piped gas option, a well-known New Delhi based energy firm recently unveiled a proposal for a roughly 1,600 km transnational, deepwater pipeline linking Oman with India’s west coast.

Fox Petroleum Ltd, part of a $10 billion multinational enterprise with interests spanning oil and gas, power generation, construction and infrastructure, made a pitch for an Oman–India Multi-Purpose Pipeline (OIMPP) venture whose estimated $5.6 billion cost would be funded entirely by foreign investors, it said.

According to reports in the Indian media, Fox Petroleum’s proposal centres on a “dual-sized single pipeline” that begins at Ras al Jifan on Oman’s east coast and makes landfall at Gujarat on the Indian coast. From Ras al Jifan, the pipeline is proposed to travel south onshore to Duqm, the site of a mega industrial and maritime hub. From Duqm, it connects with a recompression station proposed to be built on the Qalhat Seamount – also known as Murray Ridge — which lies just 300-400 metres below the ocean surface.

Local media quoted the firm’s Chairman and Managing Director, Ajay Kumar, as saying that the proposed OIMPP project would be designed to transport 8 trillion cubic feet of natural gas to India over a period of 20 years. Construction of Phase 1 of the project, covering the 1,300 km distance from Ras al Jifan to India’s Gujarat coast, would take around four years to complete. A further 300 km length would be added to the network to carry the gas from Gujarat onward to Mumbai.

Fox Petroleum says it envisages multiple gas pipelines being built by different investors between Oman and India, thereby creating something of a ‘Gas Highway’ between the two countries.
Experts say the OIMPP venture is broadly modelled on the lines of ‘The Middle East to India Gas Pipeline’, first floated by the South Asia Gas Enterprise (SAGE) in 1999. Promoted by the New Delhi-based Siddho Mal Group, in joint venture with a UK-based deep-water technology firm, SAGE has been working with a global consortium to create an ‘energy corridor’ that can transport gas from the Middle East to India, bypassing the land route through Pakistan.

At an offshore industry conference held in Muscat last December, a consultant advising SAGE on the deep-sea pipeline project said most of the technical, economic and financial preparations for the ambitious venture had already been completed. The project team is currently discussing possible gas purchase agreements with the sellers, he stated.

More recently, in February, the potential for a gas pipeline link between the two countries was among an array of issues that were discussed during the visit of India’s External Affairs Minister Sushma Swaraj to Muscat. Both sides agreed to revisit the long-stalled initiative, according to media reports.

http://omanobserver.om/iran-deal-bodes-well-for-oman-india-pipeline-project/

 

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The Oman Gas Pipeline: India’s Underwater Energy Supply Chain

Vijay Sakhuja Director (Research), Indian Council of World Affairs (ICWA), New Delhi




Energy hungry India has invested enormous political and diplomatic capital in gas pipelines such as the Iran-Pakistan-India IPI and the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipelines, from Iran and Turkmenistan. However, these projects have been mired in problems of insecurity and cost. Plans to build the IPI have been shelved and the TAPI is still on the drawing board. Similarly, in 2003, a pipeline project to transport gas from Iran to India was explored but did not fructify due to high construction and transportation costs. The focus has shifted to the Oman-India Pipeline (OIP) which would run below the sea across the Arabian Sea. Iran is now being included in the pipeline network and there are plans to build an energy corridor to link Turkmenistan. The underwater supply route is expected to eliminate potential vulnerabilities arising from attacks or hijacking of pipelines by subversive elements in Pakistan and Afghanistan, and to ensure uninterrupted supply of gas to India.

The OIP project was first mooted in 1999. The two sides signed an agreement for the supply of 56.6 million cubic meters (MCM) of natural gas through the 1,130 kilometer undersea pipeline across the Arabian Sea to be built at a cost of $5 billion. The seabed survey had revealed that the initial route of the pipeline would be via complex and rugged seabed terrain and that there were ‘faulted up thrusts’ enroute which would pose difficulties in the smooth and level laying of the pipeline. A new route was explored which was marginally shorter, but the technological capacity – including the lack of ships to lay pipes at 3500 meter depths, and pipeline repair systems – for deep sea pipe laying was unavailable then.

Today, the OIP project has reemerged and aims to push forwards given the existence of improved deepwater design and pipe laying technology. It will be developed by a global consortium of highly experienced designers who would execute the project using modern pipe laying techniques, systems, processes and service providers. Perhaps what is more significant is that Iran has indicated its willingness to join the project and transport gas from its South Pars gas fields to India via the undersea pipeline. Earlier this year, the foreign ministers of Iran, Oman and India met and held negotiations on the issue of Iran-Oman-India (IOI) gas grid.

According to a study conducted by the South Asia Gas Enterprise Pvt. Ltd. (SAGE), the 1400 kilometer long IOI pipeline would cost $ 4-5 billion and would transport 31 MCM of gas daily. Meanwhile, Iran is willing to ship gas from Turkmenistan and facilitate linking that route to the IOI pipeline. This could potentially result in India shelving the TAPI project.

These developments are indeed noteworthy and offer a ray of hope for India to enhance its energy security; perhaps it is also the most economical method of supply. However, there are several challenges to underwater pipelines, arising from natural and manmade hazards. Furthermore, underwater pipelines are ‘poorly armoured, rarely patrolled and occasionally monitored’ and therefore require inspection and repair capabilities which are expensive to source.

There are three potential threats the pipelines will have to face: First arises from natural catastrophic events such as underwater earthquakes and Tsunamis. Although the pipes can withstand some ground shaking, severe conditions could result in ruptures and/or damages, resulting in the seepage of gas – thus causing potential environmental disasters.

The second type of threat would be posed by anchors of the ships in shallow waters. Although undersea pipelines and cables are marked in nautical charts, there have been instances when pipelines have been damaged.

The third threat arises from the wear-tear of pipes due to ageing. Although these underwater pipelines are designed to last for at least 30 to 40 years, material fatigue due to seawater corrosion can considerably reduce their durability. Furthermore, there are issues of pipelines that have been set aside following the completion of their operational life; these pipes in disuse can cause enormous environmental damage, which in turn requires expensive and difficult clean-up efforts.

Inspection and repair of undersea pipelines is a complex issue and poses a number of operational challenges. This would require underwater laser scanning systems, and CAD software to generate 3D models of the damaged/leaking pipes to carry out repair without risks to humans, among others. Iran and India have underwater operational experience and possess platforms such as submarines, but neither has the experience or technology for seabed operations.

There is an opportunity for Oman, India and Iran to develop leak detection, prevention and clean-up practices, as well as to develop manned and unmanned systems that could potentially boost their underwater platform industry.

http://www.ipcs.org/article/india/t...dias-underwater-energy-supply-chain-4421.html

 

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Oman plans to issue undersea gas pipeline tender in May
19 April, 2018

Pipeline is being re-routed to avoid UAE-controlled waters



REUTERS/Morteza Nikoubazl
By Jethu Abraham, Thomson Reuters Projects News

Oman is planning to invite bids to build an undersea natural gas pipeline between Sohar and Iran next month, the Sultanate’s oil minister has said.

Mohammed Bin Hamad Al Rumhi told Thomson Reuters Projects that work related to seabed surveys, design of the pipeline and its accessories and the compressor stations have been completed.

“We are putting the final touches to the tender for the construction process to start. Pending some formalities, the country would be ready to issue the notice to invite bids next month,” he said on the sidelines of the Kuwait Oil and Gas Summit on Tuesday.

Al Rumhi added that eight consortiums from across the globe have already expressed interest in involvement with the project.



“It is not very deep and is technically a small line in comparison to the region’s pipelines, with a capacity of one billion cubic feet a day,” he explained.

In August 2016, Reuters reported that Oman and Iran agreed to change the route and design of the planned pipeline to avoid waters controlled by the United Arab Emirates.

The report said both countries had renewed efforts to implement the project after the lifting of international sanctions on Tehran in 2016, but plans were considerably delayed by disagreements over price and US pressure on Muscat to find other suppliers.

The report also noted that the planned pipeline would connect Iran’s gas reserves to Omani consumers as well as liquefied natural gas (LNG) plants in Oman that would re-export the gas.

“We are looking at building industries and at expanding our LNG production...we are also in talks with international oil companies for finance,” Al Rumhi said, adding that Oman is also talking to India to explore opportunities from the pipeline.

“We are talking about getting a pipeline done from India through Oman and need the goodwill and support from all stakeholders, neighbours,” the oil minister said.

A 2014 World Energy Council report placed Oman as having the smallest proved natural gas reserves at 705.4 billion cubic metres, relative to the rest of the region.

The report noted that the country produces more gas than it can consume, exporting gas via LNG and importing a smaller total of natural gas via pipeline trade.

Al Rumhi pointed out that Oman’s demand and supply gas balance is “healthy for quite a foreseeable future, till 2040.”

“We are looking at options on putting up new industries and expanding existing industries, so it is more market driven. Instead of regulating gas distribution, we want the market to decide what is best for us to monetise whatever we find,” he said.

Earlier this month, BP announced that it will develop the second phase of Oman’s giant Khazzan gas field after the successful start-up the first phase in September 2017.

The oil major said in a press statement that the first phase is currently producing at design capacity of around one billion cubic feet of gas per day and around 35,000 barrels a day of condensate.

The Ghazeer second phase is expected to come onstream in 2021 and deliver an additional 500 million cubic feet per day and over 15,000 bpd condensate production, the statement added.

(Writing by Jethu Abraham; Editing by Anoop Menon and Michael Fahy)

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https://www.zawya.com/mena/en/story...s_pipeline_tender_in_May-ZAWYA20180419031120/