Undersea gas pipeline from Iran to make LNG cheap in India: former oil secretary

The Dollar Business Bureau 

An undersea gas pipeline of around 1,300 km from Iran, circumventing Pakistani territory, can bring natural gas to India from the Persian Gulf at prices below the rates of available LNG (liquefied natural gas) in spot market, a former oil secretary said on Tuesday.

The natural gas to be imported through the pipeline estimated at over $4 billion would cost $5-5.50 per million British thermal unit (mmBtu) to reach Indian coast, less than than the prices at which some of the local fields supply natural gas, said TNR Rao, former oil secretary, while releasing a study on Iran-India gas pipeline.

LNG imported into India via ships costs around $7.50 per mmBtu.

“The pipeline can first travel to Oman, and then onwards to Porbandar in Gujarat,” said Rao, Chairman - Advisory Board of South Asia Gas Enterprise (SAGE), the company that wants to lay the undersea pipeline.

SAGE also wants the Government to support this undersea pipeline and help buyers in entering into contract.

According to the study, the landed cost of natural gas through the pipeline will be cheaper by $2 compared to importing LNG, resulting in saving around $1 billion a year.

The pipeline would have the capacity to carry 31.5 million standard cubic meters (mscm) gas a day and will be completed in two-year time from the date of getting necessary clearances and after signing of a gas sale and purchase agreement (GSPA).

The undersea pipeline is being considered as an alternative to the Iran-Pakistan-India onland gas pipeline. India has not been taking part in discussions on the 1,036 km pipeline since 2007, citing commercial and security concerns. However, it has never pulled out officially from the $ 7.6 billion gas pipeline project.