India and Russia have agreed to explore building the world’s most expensive pipeline that can cost close to $25 billion to ferry natural gas from Siberia to the world’s third largest energy consuming nation.
The project envisions connecting the Russian gas grid to India through a 4,500-6,000km pipeline, officials said.
The shortest route will entail bringing the pipeline through Himalayas into northern India, a route which poses several technical challenges.
Alternately, the pipeline can come via Central Asian nations, Iran and Pakistan and into Western India. However, the route will be expensive when compared to the long discussed but shorter and cheaper Iran-Pakistan-India pipeline. Tehran may suggest India take its gas through IPI rather than building such an expensive pipeline, they said.
The third and the longest alternative is to lay a pipeline through China and Myanmar into North East India, bypassing Bangladesh.
While the cost of transporting gas via the long discussed IPI pipeline is less than $1per mmBtu, the same for the Turkeministan-Afghanistan-Pakistan-India (TAPI) pipeline is around $2 per mmBtu.
According to industry experts, a realistic transportation cost would be $4 per mmBtu for the Russia-India gas pipeline. This excludes the transit fee to be paid to nations through which the pipeline will pass.
Russia is seeking to expand energy ties in Asia amid tensions with the West sparked by Moscow’s annexation of Crimea in 2014.
Indian companies have snapped up stakes in production assets in Siberian fields.
The MoU is being seen as an attempt to strengthen ties between the world’s largest oil producer and the world’s fastest growing fuel consumer.
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