India in consultation with Russia to swap gas with China

The Dollar Business Bureau

India is in initial discussions with Russia to swap the natural gas with China and Myanmar as a substitute to creating world’s costliest pipeline, which is estimated to be around $25 billion.

In October, the two countries had inked an initial agreement for building a 4,500-6,000 km long pipeline from Siberia to the third biggest energy consuming country of the world.

Discussions are on with Russia’s Gazprom for an alternative swap, said Narendra K Verma, Managing Director, ONGC Videsh Ltd on the sidelines of Petrotech 2016 conference in New Delhi.

Through an existing pipeline, Myanmar supplies gas to China. If Russia can give the same amount of gas to China, then it can reverse the gas flow from Myanmar to China and we can bring that gas to India,” Verma said.

“Therefore, in effect, Russia will provide gas to China and in return China will supply its share of gas from Myanmar to India. A smaller pipeline from Myanmar will need to be built into eastern India for importing that gas,” he added.

This swap arrangement is more economical but it would require the consent of China and Myanmar.

The considered pipeline from Russia to India will pass through Himalayas into India from Northern side, a route which has various technical challenges.

The alternate route would be that the pipeline can pass through the Central Asian nations, Iran and Pakistan and enter into Western India.

However, this route will be quite costly as compared to cheaper and shorter Iran-Pakistan-India (IPI) pipeline.

Alternatively, the longest route is to lay a pipeline via Myanmar and China into the India from North East border, bypassing Bangladesh.

According to preliminary estimate of cost prepared by state-run Engineers India Ltd (EIL), which in October signed a pact with Gazprom for reviewing the Russia-India pipeline, the 6,000 km longest route may cost around $25 billion.