ASSOCHAM seeks Petroleum Ministry support for subsea pipeline project

Apex industry body ASSOCHAM has urged the Ministry of Petroleum and Natural Gas to extend their support to a subsea natural gas pipeline project being developed by a global consortium led by the South Asia Gas Enterprises (SAGE), more so as other gas line projects like the Iran-Pakistan-India (IPI) and the Turkmenistan-Afghanistan-Pakistan-India (TAPI) have made little progress.

“An underwater project to bring natural gas directly from the Middle East to India being developed by a global consortium under the leadership of SAGE, a Senior Member of The Associated Chambers of Commerce and Industry of India (ASSOCHAM) may be examined for consideration of grant to support the project,” said ASSOCHAM in a communication addressed to M. Veerappa Moily, Union Minister of petroleum and natural gas.

Geo-political implications

Such projects involve geo-political implications owing to severe global competition to access natural resources like oil and gas from other countries and even international companies, thus it is difficult for private companies to conclude them on their own without significant government support as they involve long-term gas supply sale and purchase contracts, said ASSOCHAM.

“One of the important features of this pipeline corridor is that it will completely bypass Pakistan, thus averting major threat perception from fundamentalist elements and resultant supply disruption,” said D.S. Rawat, Secretary General of ASSOCHAM.

Project development

“The concerned pipeline project is planned to be set up on common carrier basis and it would allow gas suppliers and buyers to buy and sell gas on commercial terms and transport it to India after payment of competitive pipeline tariff to SAGE,” said Rawat.

“Considering the anticipated shortage of natural gas in the future, even the public sector companies like Gas Authority of India Limited (GAIL), Indian Oil Corporation (IOC) and Engineers India Limited (EIL) are co-operating with the SAGE through arrangements like Memorandum of Understanding (MoU) or Proof of Contact (PoC) to develop the project,” he added.

All the details regarding functioning of the project have been explained twice in the past through presentations given in the Ministry of Petroleum and Natural Gas, highlighted the ASSOCHAM letter. “Other concerned ministries of External Affairs, power, chemicals and fertilizers and even the Planning Commission have also been apprised of the project.”

Adapted from press release by Hannah Priestley-Eaton

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