New Delhi

India must fully exploit the economic opportunities from lifting of western sanctions on Iran and bypass Pakistan for import of natural gas from Iran, according to Assocham.

The industry body also suggested that it enhance its merchandise trade with the key West Asian strategic nation through signing of a preferential trade agreement (PTA).

“Lifting of western sanctions on Iran throws up a great opportunity for India to transport natural gas from Iran to Porbandar port in Gujarat, bypassing Pakistan – the main sticking point for other multilateral projects of Turkmenistan-Afghanistan-Pakistan-India (TAPI) and Iran-Pakistan-India (IPI),” it said.

Lifting of the sanctions holds the promise of starting an undersea pipeline project that could bring Iranian gas to India via the Arabian Sea, bypassing Pakistan.

“With the IPI pipeline still stuck and the TAPI pipeline yet to take off, the South Asia Gas Enterprises Pvt (SAGE) has proposed an under sea pipeline bypassing Pakistan’s exclusive economic zone (EEZ) to transport up to 1.1 billion standard cubic feet per day of gas from Chabahar in Iran and Ra’s al Jifan in Oman to Porbandar in Gujarat with a spur line to Mumbai later.

“The 1,200-1,300 km pipeline is set to cost around USD 4.5 billion,” the chamber pointed out.

India is increasingly looking for opportunities overseas for natural gas. India, according to Assocham, needs to resurrect Iranian oil and gas projects stalled due to the international sanctions.

The consortium of Indian public sector companies – ONGC Videsh, Oil India and India Oil Corporation – had discovered gas in the Farzad-B block in Iran in 2008 and subsequently, prepared a field development plan to recover about 12.8 trillion cubic feet of gas.

The plan had to be abandoned following sanctions on Iran.

India has already spent USD 90 million on exploration, Assocham said.

“Given the kind of serious political problems, the proposed pipeline projects involving Pakistan, it is feared, may remain a pipe dream. All other viable alternatives to enhance India’s energy security must be explored,” Assocham Secretary General D S Rawat said.

The SAGE pipeline, also called Middle East to India Deepwater Pipeline (MEIDP) project, would start from Chabahar on the southern coast of Iran and Ra’s Al Jifan on the Oman coast. The pipeline, which would run deep in the Arabian Sea, would bring gas to Porbandar in South Gujarat.

The association pushed for a PTA with Iran, citing the example of one with Pakistan that has boosted its exports to Iran and increased bilateral trade as well.

The Pak-Iran trade saw considerable progress during the first three years of the PTA i.e. from 2006-07 to 2008-09 in which bilateral trade rose to an unprecedented level of USD 1,321.32 million from USD 573.76 million.

PTI