1.
CHALLENGES OF CROSS BORDER GAS
PIPELINES IN
SOUTH ASIA
Engr. Khondkar Abdus Saleque
(Peng & FIEB)

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.
4/3/2013 Engr. Saleque
3
Introduction

4.
4/3/2013 Engr. Saleque
4
…MAP OF SOUTH ASIA

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.
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.
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.
TOP TEN NATURAL GAS PRODUCTING
COUNTRIES
Countries % of Total Resrve
4/3/2013
Russia 18.0
Iran 11.1
Engr. Saleque
Turkmenistan 8.73
Qatar 8.50
USA 3.00
KSA 2.73
Azerbaijan 2.02
Venezuela 1.84
Nigeria 1.75
8
Algeria 1.37

9.
GAS RESERVE OF SOUTH ASIAN
COUNTRIES
4/3/2013
Ranking Countries Reserve of
World %
Engr. Saleque
1 India 0.57
2 Pakistan 0.44
3 Myanmar 0.15
4 Bangladesh 0.10%
5 Afghanistan 0.03
9

10.
4/3/2013
Opportunities,
Engr. Saleque
Prospects &
Challenges
10

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.
4/3/2013 Engr. Saleque
12
IPI PIPELINE…

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.
…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.
…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.
…IPI CHALLENGES…
 On 1 May 2012, Pakistan's 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 country's national
interest.
 On 4 September 2012, the project was
announced to commence before October
2012 and be completed by December 2014
16

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.
…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.
IPI MILESTONES…
 In April 2008, Iran expressed interest in
4/3/2013
the People's 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.
4/3/2013 Engr. Saleque
20
TAPI PIPELINES…

21.
Turkmenistan Afghanistan Pakistan & India Gas Pipeline
Project (TAPI)
Osman Yulatin
South Gas Field
21
Fazilka

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.
…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.
…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.
…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.
…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.
…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.
…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.
MYANMAR –BANGLADESH –INDIA
PIPELINE
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.
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.
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.
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.
ROADBLOCKS IN TRANSBORDER
ENERGY 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.
4/3/2013
Suggestions &
Engr. Saleque
Recommendations
34

35.
CHALLENGES OF CROSS BORDER
PIPELINES
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.
THANK YOU