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Study: India, Russia Building $25 Billion Pipeline

India and Russia are studying the construction of a gas pipeline to transport Russian gas from Siberia to India, over 2,800-3,700 miles. (Image Courtesy: Google)

Energy demand is highly increasing in developing country like India. Thus there are great needs to find alternative ways of meeting those energy demands of the nation. India and Russia has agreed to explore for building the world’s most expensive pipeline which will be costing close to $25 billion.

This pipeline will be intended to ferry natural gas from Siberia to the world’s third biggest energy consuming nation. This pipeline is for connecting the Russian gas grid to India via 4,500 km to 6,000 km pipeline.

Panaji : India and Russia have agreed to explore building the world's most expensive pipeline costing close to $25 billion to ferry natural gas from Siberia. (Image Courtesy: Google)
Panaji : India and Russia have agreed to explore building the world’s most expensive pipeline costing close to $25 billion to ferry natural gas from Siberia. (Image Courtesy: Google)

Route selection for pipeline

Shortest route will be entailing to bring the pipeline through Himalayas into Northern India. It is a route which poses several technical challenges. Yet the pipe can come via Central Asian nations, Iran and Pakistan into Western India.

This route will turn out to be expensive when compared to the long discussed but shorter and cheaper Iran-Pakistan-India pipeline. Tehran may be suggesting that India takes its gas through IPI rather than building such an expensive pipeline.

Third and longest alternative is laying the pipeline through China and Myanmar into North East India while bypassing Bangladesh.

According to the preliminary cost estimation which was prepared by state-owned Engineers India Ltd. (EIL), it signed an agreement with Russian gas monopoly Gazprom. This was done for studying Russia-India pipeline which is the longest route of 6,000 km which may cost close to $25 billion.

Transportation costs

Transporting gas may cost to $12 per million British Thermal Unit according to EIL. The Memorandum of Understanding (MoU) is signed in presence of Prime Minister Narendra Modi and Russian President Vladimir Putin at the India-Russia annual summit. It was over the sidelines of the eight BRICS summit here.

It also envisages roping in ONGC Videsh Ltd, gas utility GAIL India Ltd and Petronet LNG Ltd for the study. Sources even said that the natural gas being produced in the East Siberian fields is to be pumped to the Russian gas grid. It would be connected to India via cross country pipeline network.

Cost of transporting gas via the long discussed IPI pipeline is even less than $1 per mmBtu. It is same for the Turkeministan-Afghanistan-Pakistan-India pipeline which is around $2 per mmBtu.

According to experts from industry, realistic transportation cost would be $4 per mmBtu for the case of Russia-India gas pipeline. It is excluding the transit fee to be paid to the nations through which pipeline is going to pass.

Russia is further seeking for expanding its energy ties in Asia amid the tensions with the West sparked by Moscow’s annexation of Crimea in 2014. Indian companies have even snapped up stakes in production assets in Siberian fields.

MoU is seen as an attempt for strengthening ties between the world’s largest producer and world’s fastest growing fuel consumer.

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