Challenges of cross border gas pipelines in South Asia


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Challenges of cross border gas pipelines in South Asia

  2. 2. CHALLENGES OF CROSS BORDER GAS PIPELINES  Introduction 4/3/2013  Opportunities, Prospects and Engr. Saleque Challenges  IPI, TAPI, TRI-Nation Pipeline  Suggestions and Recommendations 2
  3. 3. 4/3/2013 Engr. Saleque 3 Introduction
  4. 4. 4/3/2013 Engr. Saleque 4…MAP OF SOUTH ASIA
  5. 5. CROSS BORDER PIPELINES 4/3/2013 Now most of the political debates are directed towards ensuring the availability and security of supply of energy. Engr. Saleque The countries are caught in the grip with the raising energy demand and prices The energy crisis and debate over energy security and sustainability are concentrated on two issues: The high dependence on energy import and the increasing need for diversification of the energy sources 5
  6. 6. FUEL CHOICE 4/3/2013 The current debate is all about the geopolitics of supply of the natural gas, as leading energy source and the pillar of the energy stability in the Engr. Saleque continent. The energy crisis in most of the south Asian countries emanates from arranging the required fuel and fuel diversification Limited oil reserve /resource , emissions creating cimate change related impacts creates challenges coal and liquid fuel use. Natural Gas is relatively environment friendly 6
  7. 7. RESOURCE POTENTIAL 4/3/2013 Bangladesh ,India , Pakistan and Afghanistan has some proven reserve and significant potential untapped natural gas Engr. Saleque Next Door neighbors countries Myanmar and Central Asian Countries [ Turkmenistan , Iran ] have huge surplus which can feed the South Asian Countries for several years Talks and plans for IPI, TAPI , Myanmar- Bangladesh –India Pipelines are going on for almost one and a half decade 7
  8. 8. TOP TEN NATURAL GAS PRODUCTINGCOUNTRIESCountries % of Total Resrve 4/3/2013Russia 18.0Iran 11.1 Engr. SalequeTurkmenistan 8.73Qatar 8.50USA 3.00KSA 2.73Azerbaijan 2.02Venezuela 1.84Nigeria 1.75 8Algeria 1.37
  9. 9. GAS RESERVE OF SOUTH ASIAN COUNTRIES 4/3/2013Ranking Countries Reserve of World % Engr. Saleque1 India 0.572 Pakistan 0.443 Myanmar 0.154 Bangladesh 0.10% 5 Afghanistan 0.03 9
  10. 10. 4/3/2013Opportunities, Engr. Saleque Prospects & Challenges 10
  11. 11. PROSPECTS OF GAS TRADING Gas imports from Central Asia [TAPI], 4/3/2013 Iran [IPI], and Myanmar [Myanmar to India Pipeline Across Bangladesh] Engr. Saleque Cross Border Gas Pipelines from Gas rich neighbors can create long term energy security for energy starved south Asian Countries Could replace Oil and Coal and reduce emissions 11
  12. 12. 4/3/2013 Engr. Saleque 12IPI PIPELINE…
  13. 13. …IPI PIPELINES… Conceptualized in 1950s by a Pakistani civil engineer and conceived by Indian and Iranians 4/3/2013 in 1989, preliminary agreement was signed in 1995 between Iran and Pakistan Engr. Saleque   1999 between India and Iran 2775 KM [1724 Miles] 56” OD Trans- border Gas Transmission Pipeline . Design Capacity : 4 BCM Discharge : 1 Tcf per annum National Iranian Oil Company, Sui Northern Gas Pipeline Companies, Sui Southern Gas Company, GAZPROM 13
  14. 14. …IPI CHALLENGES… 4/3/2013 USA asked Pakistan to abandon the pipeline project : January 2010 Engr. Saleque Iran and Pakistan signed an agreement on the pipeline : March 2010 Each country agreed to complete its section by 2014. In July 2011, Iran completed construction of its section 14
  15. 15. …IPI CHALLENGES… Pakistan proposed that the government 4/3/2013 might have to impose a tax on consumers, or seek government-to-government Engr. Saleque arrangements with Iran, China and Russia to build the pipeline On 15 April 2012 Saudi Arabia offered to deliver an "alternative package" to Pakistan if the country abandoned its cooperation with Iran. In addition to oil the package would also include a cash loan and oil facility 15
  16. 16. …IPI CHALLENGES… On 1 May 2012, Pakistans Foreign 4/3/2013 Minister, Hina Rabbani Khar said, Pakistan will complete the huge pipeline Engr. Saleque project "at any cost" and that the project was in line with the countrys national interest. On 4 September 2012, the project was announced to commence before October 2012 and be completed by December 2014 16
  17. 17. …IPI MILESTONES… Conceived: Pakistani civil engineer 4/3/2013 Malik Aftab Ahmed Khan in mid 1950s Conceptualized: Rajendra K. Pachauri Engr. Saleque in partnership with Ali Shams Ardekani, former Deputy Foreign Minister of Iran in 1989 Preliminary agreement signed between Pakistan & Iran : 1995. Preliminary agreement between Iran and India was signed: 1999 17
  18. 18. …IPI MILESTONES… In 2004 the project revived after the 4/3/2013 UNDP report Peace and Prosperity Gas Pipelines by Gulfaraz Ahmed Engr. Saleque was published in December 2003 In February 2007, India and Pakistan agreed to pay Iran US$4.93 per million British thermal units (US$4.67/GJ) 18
  19. 19. IPI MILESTONES… In April 2008, Iran expressed interest in 4/3/2013 the Peoples Republic of China’s participation in the project. Engr. Saleque In August 2010, Iran invited Bangladesh to join the project In 2009, India withdrew from the project over pricing and security issues, and after signing a civilian nuclear deal with the United States in 2008 19
  20. 20. 4/3/2013 Engr. Saleque 20TAPI PIPELINES…
  21. 21. Turkmenistan Afghanistan Pakistan & India Gas Pipeline Project (TAPI) Osman Yulatin South Gas Field 21 Fazilka
  22. 22. TAPI NATURAL GAS PIPELINE• 1,735 km [1078 miles] pipeline linking Turkmenistan, Afghanistan, Pakistan and India (TAPI)• An energy bridge to link gas resources of Turkmenistan with the energy starved sub- continent• Open access TAPI Pipeline will transport 33 billion cubic metres per of natural gas per year• Expected to boost the economies of all the four countries 22
  23. 23. …TAPI PIPELINES…A Gas Pipeline Framework Agreement, signed by representatives of the four 4/3/2013 participating nations on April 25, 2008 in Islamabad, envisaged construction to start in Engr. Saleque 2010, supplying gas by 2015.  1,000-mile route from Central to South Asia - Turkmenistan (Dauletabad) – Afghanistan (Heart, Helmand – Kandahar) – Pakistan (Quetta and Multan) – India (Fazilka).  ADB on the basis of its study reported that the estimated capital cost was $7.6 billion and it would consider financing the project 23
  24. 24. …TAPI PIPELINES 4/3/2013 Four country framework agreement installed. India and Pakistan signed GPSA with Engr. Saleque Turkmenistan Transit tariff agreement among transit countries were under negotiation But in efforts to attract investors for build, own and operate the about 8 Billion dollar pipeline the project sponsor ADB got very poor response. 24
  25. 25. …TAPI PIPELINES…A Gas Pipeline Framework Agreement, signed by representatives of the four 4/3/2013 participating nations on April 25, 2008 in Islamabad, envisaged construction to start in Engr. Saleque 2010, supplying gas by 2015. The announced 1,000-mile route would follow the ancient trading route from Central to South Asia, extending from the Dauletabad gas field in Turkmenistan along the highway through Herat, Helmand and Kandahar in Afghanistan, to Quetta and Multan in Pakistan, and on to Fazilka in 25 India.
  26. 26. …TAPI PIPELINES… Participating countries have held many 4/3/2013 high-level meetings during the past eight years, with Asian Development Bank Engr. Saleque (ADB) sponsorship and multilateral support The ADB completed a feasibility study in 2005 that was updated in 2008 The ADB reported that the estimated capital cost was $7.6 billion, and said it would consider financing for the project. 26
  27. 27. …TAPI MILESTONE… Turkmenistan promised independent 4/3/2013 certification of the gas available for the pipeline Engr. Saleque Plan for the line to be built and operated by a consortium of national oil companies from the four countries Special-purpose financial vehicle would be floated, and international companies would likely to join in laying and operating the pipelines. 27
  28. 28. …TAPI MILESTONE 4/3/2013 Four country framework agreement installed. India and Pakistan signed GPSA with Engr. Saleque Turkmenistan Transit tariff agreement among transit countries were under negotiation But in efforts to attract investors for build, own and operate the about 8 Billion dollar pipeline the project sponsor ADB got very poor response. 28
  29. 29. MYANMAR –BANGLADESH –INDIAPIPELINE 4/3/2013 Bangladeshi Private Sector Initiative Mohona Holdings Ltd conceived the Myanmar –India pipeline across Bangladesh Tri Nation Gas Engr. Saleque Pipeline in early 1900s The initiative advanced almost to take off stage in early 2005 when Energy Ministers of three countries after a summit meeting at Yangoon agreed on principle to go ahead with it . This pipeline if built would have a capacity of transporting 1 BCF of gas from Gas Fields in Myanmar across Bangladesh to Indian Eastern states by 2009 29
  30. 30. TRI NATION PIPELINE 4/3/2013 The representatives of three countries comprising Technical and Financial experts met at Yangoon for a two day extensive brain storming in Engr. Saleque February 2005 A draft MOU was initialed agreeing on the route and nature of the pipeline MOU also included proposal for further techno economic feasibility study for the open access pipeline permitting injecting and siphoning off gas along pipeline route. 30
  31. 31. TRI NATION PIPELINE MOU included the following 4/3/2013 unresolved bilateral issues between Bangladesh and India: Engr. Saleque  Possibility of Bangladesh accessing to Hydropower of Nepal and Bhutan across India  India guaranteeing unhindered trading corridor among Bangladesh , India and Nepal across the Chicken neck  India removing tariff and non tariff barriers to Bangladesh export commodity to Indian market  It was agreed to advance resolution of the these bilateral issues side by side to Tri Nation Pipeline discussion 31
  32. 32. TRI NATION PIPELINE India was hesitant in buying gas at 4 US$ / MMBTU 4/3/2013 Protracted discussions between Bangladesh and India without any concrete result. Engr. Saleque China offered better deal to Myanmar and finalized agreement for import of gas at attractive price It is an example of lost opportunity for S, Asia resulting in:  India buying LNG at US$14 /MMBTU from Qatar and Other sources  B’desh gas crisis prolonged, as it has opportunity loss of about 500 MMCFD 32
  33. 33. ROADBLOCKS IN TRANSBORDERENERGY TRADE Geopolitics 4/3/2013 Bilateral political irritants – Border disputes, Water sharing issues, etc. Engr. Saleque Lack of political will and commitment Insurgency and security concerns Absence of effective independent regulatory institutions for creating level play ground for private and public sector companies. Lack of effective public –private partnership. Corruption and political interference 33
  34. 34. 4/3/2013 Suggestions & Engr. SalequeRecommendations 34
  35. 35. CHALLENGES OF CROSS BORDERPIPELINES 4/3/2013 Geopolitics Security Concerns Engr. Saleque Absence of Functional Independent Regulatory Infrastructure Poor Governance and Weak State Owned Enterprises Poor Pricing of gas and energy Lack of faith among nations for several irritants Resources constraints for investing in Multi Billion Dollar Project Weak PPP mechanism 35
  36. 36. THANK YOU