India Rethinking Stance On Gas Pipeline

June 2010 Vol. 237 No. 6

After Iran and Pakistan signed a recent agreement for a bilateral natural gas pipeline, India asked to reopen negotiations to make the project trilateral.

While pricing issues between Iran and Pakistan seem resolved, questions about pipeline security in Pakistan, pricing with India, and the role or non-role of China, are only three of the sets of problems still awaiting resolution.

After India’s withdrawal in 2008, China expressed interest in expanding the bilateral Iran-Pakistan project into a trans-Pakistan route to Xinjiang and from there to eastern China. Construction is estimated to cost $7.4 billion. Gas would be supplied from the South Pars field, where Russia’s Gazprom is a big investor, and the pipeline would have initial capacity of 22 Bcm/y that could be expanded to 55 Bcm/y, half of which could go to India if it becomes a partner.

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