Wednesday, October 12, 2005
India, Iran and Europe
What seems a surprise is that India's rise to sustained attention on the global world energy agenda has happened so much sooner than at least some observers (admittedly this report was written before 11 September 2001 and thus while the Taliban still held power in Kabul) expected it to happen.
An article earlier this year by an RFE/RL analyst 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. (I have written about these issues in the past but the materials are not on the website. I will do my best to post them soon and then insert links into this weblog entry.)
The RFE/RL analyst, and much North American commentary and analysis in general fails to mention the Nabucco pipeline project, on which construction began a few months ago. One reason for this is deserved skepticism that the project may not be fully realized anytime soon. (Nabucco, the title of an opera by Verdi, is the Italian name for the Babylonian king known in English as Nebuchadnezzar (605–562 BCE), architect of the possibly fictional Hanging Gardens of Babylon—of which no record exists in contemporary accounts and no archeological trace has been found—who conquered Jersualem in 586 BCE, razed the First Temple and, through what is now called "forced population transfer", initiated the period known in Bible studies as the Babylonian captivity of the Jews.) The Nabucco project is supposed to take natural gas to Europe from the Caspian Sea region including Iran, and putatively Iraq not to mention Egypt and North Africa, via Turkey, Bulgaria, Romania, Hungary and Austria. Earliest deliveries are projected for the end of the current decade, but schedules for these things have a way of slipping. Parts of the pipeline designated for Nabucco may be built, but there are significant strategic obstacles to the realization of the whole project. Every segment of it will require multilateral international negotiations. Even the relatively simple Baku–Tbilisi–Ceyhan pipeline was long in the making, and only strategic political and economic decisions by main European players made it a reality in the end.