Iran's loss is Turkmenistan's gain, India to buy piped Turkmen gas

New Delhi
25 November 2010

The US-backed gas pipeline project from Turkmenistan to India, via Afghanistan
and Pakistan, is expected to make progress on the price of gas and the security of its
delivery when Ashgabat, the capital of Turkmenistan, hosts a meeting in the second
week of December.

The 1,680-kilometre-long, eight-million-dollar pipeline will bring Caspian gas from
Dauletabad in Turkmenistan to Fazilka in Ferozepur district of Punjab. According to some
estimates, Turkmenistan may have the world's fourth largest gas reserves.

India will be represented in the Ashgabat meeting but not by Prime Minister Manmohan
Singh. On the other hand, the Turkmen, Pakistani and the Afghan delegations are
expected to represented at the political level. The Prime Minister's absence precludes
the possibility of high-level talks with Pakistan on the margins of the summit.

Turkmenistan hopes a gas sales purchase agreement may be signed next month but a
package of agreements are still being discussed, so the signing of the pact will have to
wait for the technical issues to be sorted out. It is likely that the technical working group
will meet in Ashgabat early next month to tie up loose ends.

The TAPI (Turkmenistan-Afghanistan-Pakistan-India) pipeline will come at the expense of
the still-born IPI (Iran-Pakistan-India) project. Piped gas from Iran has become the latest
casualty of the foreign policy "congruence" between India and the US, as spelled out in
the Hyde Act of 2006, which was the precursor to allowing the negotiation of the India-US
nuclear deal. It expected India's "full and active cooperation to dissuade, isolate and if
necessary sanction and contain Iran."

At the time, India insisted it will only be concerned with the 123 Agreement, not the Hyde
Act, and that the references to Iran were contained in the non-binding provisions of the
legislation. However, in practice, India has consistently been distancing itself away from
Iran even as it attempts to pursue infrastructure projects in Iran that are crucial to India's
connectivity to Afghanistan.

The US is opposed to India and Pakistan buying piped gas from Iran but while Pakistan
has gone ahead and signed a pipeline deal with Iran, India has been careful not to ruffle
American feathers.

Last week, US deputy assistant secretary of state Susan Elliott said the TAPI pipeline
could boost stability across the war-torn region. Speaking at an energy conference in
Ashgabat, she said the US supports the project.

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