India questions IPI project viability

LONDON, July 28 (IranMania) - The Indian government casts doubts on the Iran-Pakistan-India gas pipeline project, saying its economic viability has to be studied, PressTV reported.

"We have to see the economic viability of the pipeline, given the extra costs of insurance, since the pipeline will pass through areas that are not stable," said Indian Prime Minister's special envoy, Shyam Saran, in New Delhi on Saturday.

His remarks come about 10 days after the Iranian Oil Minister Gholam-Hossein Nozari and his Indian counterpart Murli Deora agreed in an energy conference in Madrid to finalize the IPI project deal by August.

Iran has addressed India's concern on the security of the pipeline passing through Pakistan by agreeing to move the delivery point to India-Pakistan border.

"We are discussing this with Iran and Pakistan now," Saran said. "If the costs are too high and we're locked into an agreement for the next 50 years, then we have a problem."

The three countries are scheduled to meet in Tehran in late July to discuss the remaining issues in the multi-billion-dollar project, including the key issue of price which has remained unsolved between Iran and India.

Iran and Pakistan have finalized a Gas Sales Purchase Agreement, based on which a periodic gas price adjustment will be agreed to by the two countries, but India has not agreed to price revision.

The United States seeks to stall an agreement on the project, also called the 'peace pipeline', to exert pressure on Tehran over its nuclear program.

The 2,775-kilometer gas pipeline will initially transfer 60 million cubic meters of natural gas per day from Iran to India and Pakistan, with capacity set to eventually increase to 150 million cubic meters per day.

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Just days after Murli Deora stated that TAPI (Turkmenistan-Afghanistan-Pakistan-India) was not feasible. To think that Pakistan is also promoting some negotiation with Balochi tribal leaders by creating a sub-committee.

Tri-lateral meet on IPI gas by July 2008

New Delhi, Tue, 24 Jun 2008 NI Wire

A trilateral ministerial meeting between Iran, Pakistan and India is likely to be held in July this year for sorting out all the problems regarding Iran-Pakistan-India (IPI) gas pipeline project, as per official source informed on Monday.

After concluding the oil meeting on Sunday, Indian Union Oil and Natural Gas Minister Murli Deora met his Iranian counterparts Gholam Hossein Nozari for resolving the obstacle in the way of IPI gas Pipeline project.

Indian oil minister informed Iranian minister about its interest in the multi-billion dollars gas pipeline project, besides notifying him in brief about the progress held in a bilateral meeting between India and Pakistan that was held earlier in April, 2008, in Islamabad.

India and Pakistan had solved the primary price differences and transit issues in a bilateral talk and a trilateral meeting is on the pipeline to sort out all differences before finalising the USD7.4 billion project.

“Most of the bilateral issues have been resolved and now a trilateral meeting of oil ministers of the three countries is most likely to take place in Tehran next month,” Petroleum Secretary MS Srinivasan informed on Monday.

Besides IPI project, India has also talked on several issues related to development of the hydrocarbons. The last trilateral meeting was held in June 2006, at New Delhi.

India, however, has accused Pakistan for making delay in this talk illustrating the reason: the frequently ministerial level changes in Pakistan. “Now, Pakistan Oil Minister has changed again”, said Srinivasan by adding, “We want to be sure that the new minister is in connect with what had been agreed on April 24 bilateral meet.”

India has problem with Iran on two major issues: price revision clause and gas sale agreement, which are expecting to be sorted out in this trilateral meeting.

‘Iran wants to deliver the gas for both the countries at the Iranian-Pakistan border while India wants the gas delivering point at Indo-Pakistan border. Pakistan has agreed on this point and assured India for its support,’ the Petroleum Secretary said.

While, on the price differences Iran is seeking to add a price revision clause in the Gas Sales Agreement, which India is opposing. “One can keep on discussing the clause for the next three year or five years and we do not need to be rigid on this point,” added Srinivasan.

The proposed IPI gas pipeline is an ambitious plan which will reduce the problem of natural gas deficiency and fuels both in India and Pakistan. Moreover, considering the increasing energy demands, it would be a huge boost to India, which produces only half of its natural gas needs. The work is expected to begin next year while the projected target of its completion is scheduled by 2012.

In the first phase, Iran would release the gas 60 million cubic metres daily, which would be distributed equally between India and Pakistan but later Iran would enhance the releasing limit up to 150 million cubic metres, as per the signed agreement.

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Sochi olympics as Abkhazia´s economical trigger

Russia has opened lucrative contracts associated with the 2014 Sochi winter Olympics to contractors in Abkhazia. Abkhazia will be the main supplier of building materials for construction work in the run-up to the Sochi Olympic Games in 2014, de facto president of the breakaway region, Sergey Baghapsh recently said. Tenders for the construction of concrete factories have already been reported.

So after a CACI-analyst study of Georgia separatist regions. Sadly for its detractors, it seems that Russia has the money and the vision to attract again the former CIS belt into its manor. Stability and rule of law, however predictable, do pay.

Clashes in South-Osetia intensifies: death-toll reaches 29

According to South Ossetian forces, 29 servicemen were killed since the early August outburst of the conflict, numbers that are not confirmed by Tbilisi. Meanwhile the children evacuation from Tskhinvali reaches 540 and is supposed to halt at 1,000. Russia has called for the US participation in the down-toning of the conflict, given the silence from US State department.

Russia and Libya: tiptoeing to a Gas Cartel?

Since Thursday 31^st Libya and Russia are finalizing their cooperation: Libya as major gas and oil producer, Russia as the problem-free dream-investor. Taking into account agreements with Algeria, resources deals from Maghreb to Mashreq of former Soviet allies follow an interesting script: oil for debt-scrap & weapons.

Moscow cancelled the debt Libya had (up to $4.5 billion), “in exchange for multibillion dollar contracts for Russian companies" after Russian Finance Minister Alexei Kudrin. For the contents of the agreements I rely on Dr. Ariel Cohen findings, namely “$3.5 billion for the state monopoly Russian Railways (RZD) to build a 500 kilometer rail line in Libya between the cities of Sirte and Benghazi, (admittedly) [...]$2 billion to $4 billion Russian deal to sell the Libyans modern arms [...]12 of the latest Su-35 multirole fighters (or Su-30MK2 according to other reports); a dozen MiG-29 SMT fighters; S-300 PMU-2 long-range surface-to-air missiles, Tor-M2E short-range SAM systems, military helicopters, submarines, warships, and army equipment.”

Securing a partnership with EU suppliers of gas and oil will unfortunately mine any energy diversification policy Brussels may consider. Talks of a Gas cartel are re-iterated, and look now more likely: Russia has been benefitting from Algeria´s expertise in LNG technology since their agreements in 2006. Moreover the deal with Algeria and recent visit to Nigeria put Gazprom closer to have a stake on the NIGAL pipeline (a.k.a. Trans-Saharan gas pipeline) or finance it.

Tshkinvali shelling: Georgia lured into open confrontation?

After Abkhazia is cleared from the world opinion, South Ossetia is stumbling into uncontrolled conflict. After a Georgian civil water cut was matched by a South-Ossetian water slashing, troop re-deploying was observed by South-Ossetian border forces, in numbers of “an artillery battalion and two mortar batteries from the 4th motorized brigade of the Georgian Defense Ministry”, moving from the army base in Gori to Tskhinvali.

Sniper firing was reported to kill 6 South Ossetians in the regional capital Tskhinvali, and as of Saturday 2nd, South Ossetian prime minister Yury Morozov ordered women, children and old people from vulnerable areas to be evacated.

South Ossetian envoy to Russia, Mr Dmirty Medoyev, precised in early July help could come from North Ossetia. Hereafter an interview from Rossiya TV.

Lack of any economic interest would make one think this conflict is a mere proxy war that was staged by Russia in retaliation of Georgian participation in the BTC (Baku Tbilisi Ceyhan) pipeline, and duly used to steer the country towards Moscow again. Yet the conflict was frozen since the demise of the USSR, before pipeline dreams were afoot. The two regions just follow their petty interests as mainly dependent on Russian tourism and trade with the north, the lack of compelling business-talk from Tbilisi being a demonstration of the current dis-functional Georgian comundrum.

Moscow may think well to enhance the already flourishing economic relationship with Sukhumi. An economically booming independent Abkhazia (it is unclear to which shade) would supposedly lure Georgia to re-open business with Russia.

What is more interesting, Moscow is not openly demanding for any annexation, insisting that South Ossetians and Abkhazians are sovereign states fit to decide, impliciting that the current situation serves her at best. Certainly a North-South Ossetia unification will alter the uneasy ethnic balance with the Inghush people, another frozen conflict Chechen separatists tried to torch with the Beslan School Hostage crisis.

On the other side, the lingering as Break-away provinces can´t continue ad libitum.

Don´t TAP-IT, IP-IT: new perspectives to India after the July 25th agreement

Just as in the Woody Allen comedy “Take the money and run”, petty plans always pay. The scenario of securing Central Asia Gas to India has caved in after the penstrokes in Ashgabat decided the resources to be of Russian property and so all the drilling projects to be started. The TAPI pipeline project was being talked to connect the Gas fields in Turkmenistan to India through Afghanistan and Pakistan. I will try to make an argument: it wouldn´t be built at all.

Far from being unlikely due to the troubled areas it is passing through (Eastern Afghanistan and Kandahar: land mined and subject to Taliban treat ), it would simply be empty as the source has changed its mind. The agreement between Russia and Turkmenistan (possibly hinted by Turkmenistan when referring in late june to better buyers" ) makes it clear where the gas would be going: from Turkmenistan to China via Russia.

To India is a bad blow and the second frustrating loss of precious resources to its more savvy competitor since the Myanmar deal. It seems now that the only alternative brings in Iran with the IPI (Iran-Pakistan-India) pipeline.

It is a more sound agreement in terms of feasibility, a deal shorter and passing through more friendly territory geographically and anthropologically; the only problem here is represented by the Balucistani Liberation Army (BLA) and the fees that since the project conception (1990) keep fluctuating. Yet in June 29^th, after the Turkmen hype of the prices, a gas sale and purchase agreement (GSPA) was finalized in a 7.4 billion dollar deal.

With Caspian oil tapped away to US interests, the big development is either the acceptation of Russia stand in Central Asia (and its reliability) or the mildening of relationship with Tehran.

In either case, it would prove an interesting precedent for Azerbaijan and Uzbekistan and would just accelerate Turkey eastward lean.

Ascertaining the obvious, the sun rises from the East.