China to Invest $2.5 Billion into IP pipeline.

[karan.1970]

You are wrong dear. A contract is only signed when a project is economically feasible. No one signs a project which is not profitable. This project is economically feasible even if the gas is only sold to Pakistan.

There is a difference between economically feasible and significantly profitable. While the 1st is acceptable, the second is desirable..

 

[karan.1970]

India will have to pay more to join the project. The reason is simple if India would have joined from the beginning the project would have been designed keeping in mind the requirements of both Pakistan and India. Now the project has been designed keeping in mind Pakistan only. If India joins there shall be certain changes in the project and since these shall be done to accommodate India she shall bear the cost. Also India shall have to pay royalty to Pakistan for using her land and also for the security of the pipeline that shall be the responsibility of Pakistan. So for India the price shall be higher. This can only be compensated if India agrees to a high volume of gas.

This all could have been avoided had India stayed with the project.

Reading your post makes me think you are an IT professional who like all of us hates Change Requests..

Personally I dont think India will join this project..

 

[karan.1970]

Just one quick question...And guys, no intention to flame.. so treat it as such..

Now building a road is something else, but laying a pipeline which will provide life blood to its Industry through a disputed region may not be considered very wise by the Chinese..That too thru a disputed region which has the highest probability in the world to explode into a military conflict...Appreciate your thoughts on this..

What if there is a limited war in the region and India makes some minor gains in the region that allows it physical proximity to the pipeline.. Would chinese want to risk something like that.. Specially since India is not a signatory to the contract...

 

[Hyde]

Just one quick question...And guys, no intention to flame.. so treat it as such..

Now building a road is something else, but laying a pipeline which will provide life blood to its Industry through a disputed region may not be considered very wise by the Chinese..That too thru a disputed region which has the highest probability in the world to explode into a military conflict...Appreciate your thoughts on this..

What if there is a limited war in the region and India makes some minor gains in the region that allows it physical proximity to the pipeline.. Would chinese want to risk something like that.. Specially since India is not a signatory to the contract...

i am not flaming either but i believe the word "IF" speaks it all

If India can control some part of Pakistan it is also possible Pakistan control some part of India in the war?

The only route to China is Pakistan, if they decide Gas they will use it, otherwise their will be no such agreements. Simple as that

The route to Iran>>>Afghanistan>>>Tajikistan>>>China is very dangerous and the security conditions in Afghanistan are not that good also. The weather temperature is too low and many peoples will die during the project espacially in winter time. So if China is smart enough they will never go this way

Apparently there is no such danger of India gaining terroritory of Azad Kashmir so this is not a valid question

 

[karan.1970]

i am not flaming either but i believe the word "IF" speaks it all

If India can control some part of Pakistan it is also possible Pakistan control some part of India in the war?

The only route to China is Pakistan, if they decide Gas they will use it, otherwise their will be no such agreements. Simple as that

The route to Iran>>>Afghanistan>>>Tajikistan>>>China is very dangerous and the security conditions in Afghanistan are not that good also. The weather temperature is too low and many peoples will die during the project espacially in winter time. So if China is smart enough they will never go this way

Apparently there is no such danger of India gaining terroritory of Azad Kashmir so this is not a valid question

Just to clarify that I was not suggesting that India will capture parts of Pakistani Occipied Kashmir. What I was suggesting was that the area is significantly prone to conflict and in a conflict there is continuous change in the boundaries. That will increase the risk to the pipeline to a large extent, specially since China's leverage with India is low..

China may if it is considering it seriously angle for a Iran, Pakistan, India, China line.. That will ensure all possible parties who will have proximity to the line are bound by contracts. That will work for India too as the only worry India has is the possibility of Pakistan disrupting supply for India. But if the same pipe goes to China, then Pak can not mess with it without stopping supply to China.. Win Win Win Win

 

[Hyde]

Just to clarify that I was not suggesting that India will capture parts of Pakistani Occipied Kashmir. What I was suggesting was that the area is significantly prone to conflict and in a conflict there is continuous change in the boundaries. That will increase the risk to the pipeline to a large extent, specially since China's leverage with India is low..

China may if it is considering it seriously angle for a Iran, Pakistan, India, China line.. That will ensure all possible parties who will have proximity to the line are bound by contracts. That will work for India too as the only worry India has is the possibility of Pakistan disrupting supply for India. But if the same pipe goes to China, then Pak can not mess with it without stopping supply to China.. Win Win Win Win

yes i remember this issue was also discussed somewhere...... i would say if they have a pipeline something like

Iran>>>Gwadar>>>India and Gwadar>>>China from the same pipeline. It might be the best option for all all four nations but then i wonder about the size of the gas pipeline it is already very huge and will further expan the width of the pipeline

anyway these is all hypothetical statements and far from reality

 

[Waffen SS]

I have serious reservations over this Iran-Pakistan Pipeline. Would we ever be able to provide adequate security for this ? Afterall it would be entering Baluchistan.

What will finance this project ?

 

[Hyde]

I have serious reservations over this Iran-Pakistan Pipeline. Would we ever be able to provide adequate security for this ? Afterall it would be entering Baluchistan.

What will finance this project ?

don't worry brother

Balochistan is an integral part of Pakistan and will remain part of Pakistan. Those who used to prank with the Sui gas has bite the dust and the remaining will shall be prisoned or killed if they ever tried to play/interfere in the national interests of Pakistan.

This pipeline will help balochistan the most by introducing new power plants in balochistan area and providing jobs to locals. Major chunk of this gas will be used in Balochistan and Sindh to avoid so it is in the best interests of these two provinces.

Just relax they will be more than happy to provide security to this gas pipeline, if they try to blow off the pipeline they will face the most interuption gas themselves

 

[Waffen SS]

don't worry brother

Balochistan is an integral part of Pakistan and will remain part of Pakistan. Those who used to prank with the Sui gas has bite the dust and the remaining will shall be prisoned or killed if they ever tried to play/interfere in the national interests of Pakistan.

This pipeline will help balochistan the most by introducing new power plants in balochistan area and providing jobs to locals. Major chunk of this gas will be used in Balochistan and Sindh to avoid so it is in the best interests of these two provinces.

Just relax they will be more than happy to provide security to this gas pipeline, if they try to blow off the pipeline they will face the most interuption gas themselves

No brother, I am not worried about break-up of Pakistan. I am only worried about the almost daily attacks on these pipelines.

You can understand what could happen to INVESTOR CONFIDENCE.

 

[Hyde]

No brother, I am not worried about break-up of Pakistan. I am only worried about the almost daily attacks on these pipelines.

You can understand what could happen to INVESTOR CONFIDENCE.

are you hearing any attacks on sui gas pipelines?

Its been years since i heard last time when they were attacked

 

[TechLahore]

What if there is a limited war in the region and India makes some minor gains in the region that allows it physical proximity to the pipeline.. Would chinese want to risk something like that.. Specially since India is not a signatory to the contract...

Just means that China will be super-interested in ensuring that those "minor gains" are never made. For the foreseeable future, they have the military and economic superiority to guarantee that to themselves.

 

[Hutchroy]

Just means that China will be super-interested in ensuring that those "minor gains" are never made. For the foreseeable future, they have the military and economic superiority to guarantee that to themselves.

All these years Pakistan "Refused to Guarantee" the Safety of the IPI Pipeline to India.

Now they have just changed their stance. It seems that India is sorely needed for the Iranian Natural Gas Pipeline - otherwise why would Pakistan take over 15 years to agree to India's Basic Demand for a Pakistani Sovereign Guarantee for the Safety of the Pipeline?

Read On :

Pakistan to India: Will ensure safety of IPI pipeline

Seeking to coerce India to join long- talked gas pipeline,
Pakistan said on Thursday it will guarantee safety of the Iran-Pakistan-India pipeline and may give New Delhi [ Images ] an equity stake in the section passing through its territory as additional surety of safe delivery of the fuel.

With New Delhi boycotting formal talks for almost three years, Iran and Pakistan this month signed last of a series of agreements for implementing the project on bilateral basis.

Islamabad [ Images ] insists the agreements have 'in-built' mechanism to accommodate India should it decide to join the project.

"We (the State of Pakistan) will stand guarantee for safe delivery of gas (at Pakistan-India border)," Mohammed Chaudhry Ejaz, additional secretary in Pakistan's ministry of petroleum and natural Resources, told PTI in an interview.

Of the 1,035-km length of the pipeline in Pakistan, only 100-odd km would be exclusively for carrying gas to India while the rest would be transporting fuel for both Pakistan and India.

"We have up to nine hours of power outages and we need Iranian gas to bridge this rising deficit. It is in our interest that the pipeline is safe and we get the gas to generate power and fuel industries," he said.

India was widely believed to have decided not to pursue the project after the 26/11 terror attacks in Mumbai with apprehensions being expressed about terrorists holding the pipeline hostage to their demands and even cutting supplies by blowing the pipeline to hurt the interest of world's second fastest growing economy.

New Delhi, however, has not officially called it quits yet and is proposing talks with Iran to sort out impediments.

It wants to take custody of gas, that triggers payments for the fuel, only at Pakistan-India border to make Iran explicitly responsible for safe passage of gas through Pakistan.

Also, it wants gas utility GAIL (India) to take a stake in the 1,035-km pipeline section in Pakistan to make the project bankable, reduce the financing cost, ensure timely execution and ensure transparent and efficient management of the operations.

"Yes, we will more than welcome India to join the project length in Pakistan," Ejaz said when asked if Islamabad was open to India taking stake.

He said Pakistan in July 2009 signed a Gas Sale and Purchase Agreement and this month signed among other pacts a Gas Transportation Agreement, which has been notorised in Paris, provides for internationally acceptable transit arrangement for gas to be supplied to India.

"The agreements can be legally enforceable in any international court of law. The transit agreement makes us liable for safe supply of gas. We stand 100 per cent committed to safely supplying gas to India," Ejaz said.

Iran, in the GSPA, has committed to selling gas either from one of the phases of the giant South Pars offshore field or divert fuel it may import from one of its gas-rich neighbouring country.

Ejaz said like India, Pakistan has a growing energy deficit.

Pakistan faces a gas shortfall of 10.34 billion cubic feet per day (bcfd) by 2015. The indigenous gas supply is projected to fall to 2.16 billion cubic feet per day from current day supply of 4.3 bcfd. The demand for gas would stand at 12.5 bcfd by 2015.

Iran plans to export 2.2 bcfd of gas through the proposed pipeline, of which Pakistan's share would be 1.05 bcfd.

If India does not participate, Pakistan had planned to consume the entire volumes. The official said Iran has laid a large 56-inch line from Persian Gulf coast to Iran-Pakistan border with a view to accommodate supplies to both Pakistan and India.

"Considering Iran's internal consumption, they did not need such a big pipeline." Ejaz said according to pricing agreement between Iran and Pakistan, the gas will cost $7 per million British thermal unit if the crude oil price was $50 per barrel, $9.4 and $13 per mmBtu at oil rate of $70 and $100 per barrel respectively.

The estimated cost of the project was USD 1.2 billion inside Pakistan from its point of entry in Balochistan up to Nawabshah, the hub of the country's gas pipeline system. New Delhi has so far downplayed the agreements, officially only saying that it had price and security concerns which need to be addressed before it can join the project.

But, it may be preparing ground to formally quit the project. India's ties with Pakistan have dipped after Islamabad failed to act against culprits of 26/11 Mumbai terror attacks [ Images ].

It sees a serious terrorist threat to the pipeline particularly in Baluchistan province, home to a militant Islamist separatist movement.

Instead, New Delhi wants to buy gas in its liquid form that can be shipped or through a deep-sea pipeline avoiding the Pakistani territory totally.

Under the Iran-Pakistan-India pipeline proposal, a 1,100-km pipeline from the South Pars gas fields in the Persian Gulf was to be laid by Iranian firms to Iran-Pakistan border.

A 1,035-km pipeline was proposed in Pakistan to connect to the gas grid in Pakistan as also carry India's share to Pakistan-India border.

The pipeline has been on the drawing board since the mid-1990s, when Iran and India inked preliminary agreements to transport gas through Pakistan.

It was dubbed the 'peace pipeline' because of hopes it would lead to a detente between neighbours India and Pakistan.

India had major disagreements with Iran on pricing and project structure of the IPI pipeline when it broke out of talks in 2007.

Tehran has been insisting that ownership of gas would be transferred at Iran-Pakistan border while New Delhi wants it to be Pakistan-India border thereby making Iran explicitly responsible for safe delivery of gas. New Delhi is also upset with Iran's frequent changes in gas price.

Iran had originally priced its gas at $3.2 per mBtu but later in 2007 revised the rates to $4.93 per mBtu at $60 a barrel crude oil prices, which was accepted by India.

Last year, it again revised it and according to the new pricing formula, the fuel will cost New Delhi $8.3 at $60 per barrel oil price at Iran-Pakistan border.

Added to this would be a minimum of $1.1-1.2 per mmBtu towards transportation cost and transit fee that India would have to pay for wheeling the gas through Pakistan, making it the most expensive fuel in the country, they said.

Sources said Iran was not willing to commit to a supply-or-pay regime wherein it would have been held accountable for non-delivery of gas at Indian border.

It, however, wants New Delhi to commit to a strict take-or-pay clause wherein India would have to pay even if it does not take deliveries.

All it now says is that if Pakistan were to disrupt supplies to India, Iran will make a proportionate cut in the quantities to be delivered to Islamabad.

Ammar Zaidi in Cancun © Copyright 2010 PTI. All rights reserved. Republication or redistribution of PTI content, including by framing or similar means, is expressly prohibited without the prior written consent.

 

[karan.1970]

Just means that China will be super-interested in ensuring that those "minor gains" are never made. For the foreseeable future, they have the military and economic superiority to guarantee that to themselves.

Tech.. I guess I am not able to put thru my point properly..

The issue I am refering to is the stability of the region.. Not whether India would go and capture the area from where the pipeline is going thru. That certainly puts a bit of a question mark on the whole piece for China ...

And I dont think in case of a war, China is going to station its military assets in Pakistan in a defensive formation against india and escalate the war into something much larger.. But in the remote chance that they do, then yes, your contention of that guarantee is true..

However Would china consider it worth its while to go to all these troubled scenarios for a gas source, which they are in a position to get from alternate means too remains to be seen

 

[RameeX Xaved]

Tech.. I guess I am not able to put thru my point properly..

The issue I am refering to is the stability of the region.. Not whether India would go and capture the area from where the pipeline is going thru. That certainly puts a bit of a question mark on the whole piece for China ...

And I dont think in case of a war, China is going to station its military assets in Pakistan in a defensive formation against india and escalate the war into something much larger.. But in the remote chance that they do, then yes, your contention of that guarantee is true..

However Would china consider it worth its while to go to all these troubled scenarios for a gas source, which they are in a position to get from alternate means too remains to be seen

so, you just dont want IPC gas pipe line to materialize by showing us such stupid hypothetical scenarios?
chinese officials are not insane that they are putting their 2.5 billion dollars in this project. so you dont worry and come out of your hypothetical world.
adios

 

[karan.1970]

so, you just dont want IPC gas pipe line to materialize by showing us such stupid hypothetical scenarios?
chinese officials are not insane that they are putting their 2.5 billion dollars in this project. so you dont worry and come out of your hypothetical world.
adios

Do you want to go thru this forum and see how many pages are dedicated to this hypothetical scenario.. take a chill pill.. if you find a topic of discussion not to your liking, stay out of it.. dont flame..