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  1. Stuck in the pipeline: A $4 bn deep-sea gas project

Stuck in the pipeline: A $4 bn deep-sea gas project

A UN resolution last March has dashed India’s hope for a natural gas pipeline from the Middle East. Internal assessment is that a proposed deep-sea gas pipeline from Oman and Iran would run into a diplomatic roadblock following the UN approval.

By: | Ahmedabad/ New Delhi | Updated: September 19, 2015 10:42 AM
gas project

The onland IPI pipeline has not taken off despite negotiations since 1995. India withdrew from the project in 2009 over security issues, gas pricing and gas volumes. Iran blames India of dropping out under pressure from the US. (Source: IE)

A UN resolution last March has dashed India’s hope for a natural gas pipeline from the Middle East. Internal assessment is that a proposed deep-sea gas pipeline from Oman and Iran would run into a diplomatic roadblock following the UN approval.

The $4-billion deepwater pipeline was proposed by South Asia Gas Enterprise (SAGE) from the Middle East — bypassing Pakistan — after the onland Iran-Pakistan-India pipeline got stuck on New Delhi’s decision to backpedal on the project because of geopolitical and security reasons.

The sea route was outside Pakistan’s exclusive economic zone (EEZ) to transport up to 1.1 billion standard cubic feet per day of gas from Chabahar in Iran and Ra’s al Jifan in Oman to Porbandar in Gujarat state with a spur line to Mumbai later.

Stuck in the pipeline“Route under finalisation for the proposed pipeline will have minimal political risk,” SAGE had claimed in a presentation to the Petroleum Ministry in May last year.

However, that situation has changed after the United Nations Convention on the Law of the Sea (UNCLOS) extended Pakistan’s seabed territory by another 150 kms on March 19.

The extension of the continental shelf from 200 nautical miles to 350 nautical miles would give Islamabad special rights with regards to exploration and use of marine resources, including energy production in the area under its jurisdiction, also described as its EEZ.

India’s assessment is that Pakistan, which is not a beneficiary of the sub-sea pipeline, was unlikely to allow the pipeline to cross its exclusive economic zone as in 1995 when Islamabad blocked a proposed deep-sea pipeline from Oman to India because it crossed its exclusive economic zone.

Under the United Nations Convention on the Law of the Sea, coastal nations are allowed economic control of the waters and seabed up to 200 nautical miles from their shores. They can further claim an extended shelf up to 350 nautical miles from the baseline of sea if they prove that the claimed area was a natural prolongation of their land.

The second problem that could crop up is that the SAGE project hinges on an offshore gas compression station on Qualhat Seamount (Murray Ridge), about 300km from the Omani coast. The seamount could now fall under Pakistan’s control and the station can be set up with Islamabad’s approval, said officials.

An email sent to SAGE on May 7, seeking its comments on the problems highlighted in the wake of UNCLOS resolution, remains unanswered.

The onland IPI pipeline has not taken off despite negotiations since 1995. India withdrew from the project in 2009 over security issues, gas pricing and gas volumes. Iran blames India of dropping out under pressure from the US.

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