Eurasia Review: India-Oman Gas Pipeline: Not Just a Pipe Dream
Energy (oil and gas) is a geopolitically sensitive commodity, and the pipelines that transport them are no different. Besides the geopolitics of the countries that produce energy and those that consume this energy, the security situation in the regions that the transporting pipelines traverse can also make a project viable and attractive to investors. As the geopolitics of the Middle East is taking a churn, India is again evaluating undersea energy pipelines from the Gulf.
The new plan proposes to transport oil and natural gas sourced from countries in the Middle East and Central Asia through deep sea pipelines via Oman to the ever-growing Indian energy market. Oman is India’s most trusted partner in the Gulf, therefore comfort levels are high between New Delhi and Muscat. Yusuf bin Alawi bin Abdullah, Oman’s foreign minister, raised the possibility with his Indian counterpart Salman Khurshid during their meeting on Feb 28. Abdullah suggested the pipeline could transport gas from Iran, even Qatar, as well as Central Asian states. Khurshid then introduced the proposal to Javad Zarif, the Iranian foreign minister, who he met later in the day.
Iran has reportedly shown interest in the project. Zarif also informed that Iran was negotiating separately with Turkmenistan for an overland pipeline to carry its gas to an Iranian terminal for export. If these proposals fructify, Iran would be looking to market gas not only from its fields but from other Gulf suppliers, even Qatar, which is India’s largest supplier of LNG. Therefore, even though sources of gas remain the same, it is the mode of transportation that is the key differentiator.
The history of the India-Oman pipeline project goes back to 1985, when Oman and India signed an agreement to expand the development of energy-related enterprises between them. In mid-1992, a joint commission was set up to identify and monitor several new areas of cooperation between Muscat and New Delhi. Oman had invested $90 million in the project over a decade ago, but it did not get implemented. MORE