Gail, IOL team to visit Iran in March for $4.5-million undersea gas pipeline

NEW DELHI: The long-proposed $4.5-million undersea gas pipeline between Iranand India is likely to get some momentum with a planned visit by key domestic gas buyers, including GailBSE -1.73 % and Indian Oil Ltd (IOL), to the Persian Gulf country early March in the backdrop of lifting of Western sanctions. 

The visit by a team comprising three gas buyers in India, including Gail and IOL, plans to discuss the cost of the gas that would be acquired through the pipeline and other modalities, people familiar with the developments indicated to ET. 

There are also plans to transport gas from Central Asian Republic of Turkmenistan to India through this pipeline, said persons familiar with the Iranian energy sector and the pipeline. 

If this proposal succeeds, gas from Turkmenistan will be transferred to Iran, and in turn, Tehran will transfer similar quantity to India under a swap agreement between Iran and the Central Asian country. 

This will be a boost for an energy-hungry India after Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline was formally launched last December. The proposed 1,400-km pipeline would transport natural gas via the Oman Sea and Arabian Sea from Iran to India whenever it fructifies. 

People familiar with the developments also indicated that gas-rich Oman might join the pipeline at a later stage, making it a tri-nation initiative, given its geographical proximity to both India and Iran. 

Last December, Iran’s state-owned National Iranian Gas Export Company’s (NIGEC’s) managing director Alireza Kameli referring to this proposed project had said, “Our negotiations have been under serious considerations for some time and we hope to soon finalise an agreement for the South Asia Gas Enterprise (SAGE) pipeline project.” 

Companies keen to buy gas from Iran will sign supply contracts with NIGEC. The proposed undersea pipeline would bypass Pakistan’s exclusive economic zone and transport up to 31.1million standard cubic metres per day of gas.

By Economic Times