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India, Iran, and Europe

India's rise to sustained attention on the global world energy agenda has happened sooner than at least some observers expected it to happen. An RFE/RL article earlier this year gives background to relatively recent developments concerning (and threats to the realization of) the Iran-Pakistan-India gas pipeline.

Political pressure from third parties aside, it is interesting that Tehran insists on exporting "lean" gas (i.e., gas not containing such other petrochemicals as propane, ethane or butane) whereas India wants gas enriched by them; and the Tehran insists on a "take-or-pay" contract, meaning India must pay for contracted gas even if it does not take delivery, while India prefers a "supply-or-pay" contract, meaning Iran is responsible for delivery of gas through third countries or must pay for contracted gas even if it is not delivered. (Iran has been burnt on take-or-pay contracts with Turkey in the past but has no recourse because its Constitution does not recognize jurisdiction by international courts.) Qatar is a competitor with Iran for the Indian market, and Oman and Kuwait are potential recipients of Iranian gas other than India. Ukraine is also a possible market for Iranian gas, through Armenia and Georgia and then either through Russia or under the Black Sea.

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