Oil and Gas Pipeline Watch

Doubts linger over Peace Pipeline

The fallout between India and Pakistan in the wake of the November attacks in Mumbai puts the $7.5 billion Iran-Pakistan-India pipeline in doubt, officials say.

Officials in the Indian Petroleum Ministry told The Hindu that relations with Islamabad have soured to the point where negotiations on the dubbed "Peace Pipeline" from the Iranian South Pars gas field are unlikely.

Pakistani energy officials had issued requests to the Indian government to hold IPI meetings in November, but no meeting took place. New Delhi has not attended a trilateral meeting on the project in at least a year.

Indian Foreign Minister Pranab Mukherjee had met with top Iranian officials on the IPI project in November, but those talks have since fallen apart.

Beyond diplomatic friction, New Delhi and Islamabad have yet to reach agreements on transit fees for gas traveling through Pakistan.

The 1,724-mile pipeline, envisioned in 1989, would carry around 2.1 billion cubic feet of natural gas per day to be divided evenly between India and Pakistan.

Pakistan had proposed to assume the Indian share in the project to move forward on the pipeline in the aftermath of the Mumbai attacks, which killed at least 173 over three days.

Nord Stream survey extended

The government of Finland granted the Nord Stream pipeline consortium an extension on permits to survey the Baltic Sea bed.

Nord Stream AG, which represents Russian, German and Dutch interests in the project, had until Dec. 31, 2008, to conduct surveys of the planned route for a submarine pipeline to Germany. Finland extended survey permits for waters in the Finnish economic zone to June 2010, the European weekly New Europe said.

Nord Stream is seen as a rival project to the Western-backed Nabucco pipeline, which will bring resources from Caspian states to Europe through Turkey, bypassing Russia completely.

Several governments have expressed concerns over the ecological impact foreseen from Nord Stream construction. The Black Sea bed is also littered with unexploded munitions and shipwrecks from World War II.

A survey in 2008 found most of the planned route for Nord Stream was safe from munitions, however.

PetroChina plans pipeline expansions

PetroChina announced plans to add another 6,000 miles to its West-East Gas Pipeline gas pipeline network by 2015 to meet demands for cleaner fuel, statements say.

The state-run China National Petroleum Company, the parent firm of PetroChina, said it would bring another 13,000 miles of pipeline to existing networks. At least half of that would go toward planned expansions to the West-East pipeline, the Shanghai Daily reported.

The West-East pipeline to Shanghai could meet up to half of domestic energy needs. It would bring around 1 billion cubic feet of natural gas from Central Asian suppliers per year.

Turkmenistan agreed to a 30-year supply deal with China for the Turkmenistan-China gas pipeline project. The government in Ashgabat, however, said during the weekend it would delay gas shipments to China, ITAR-TASS reported, citing government statements.

"Turkmenistan will begin to deliver its natural gas to China in years to come," Ashgabat said.

South Stream deal key to Russian interests

A Russian deal to acquire a controlling stake in the Petroleum Industry of Serbia (NIS) in exchange for hosting the South Stream pipeline is a victory for Moscow.

Serbian President Boris Tadic signed a deal in Moscow Dec. 24 giving energy monopoly Gazprom a 51 percent share of NIS for $556 million and a share in the South Stream pipeline to Italy.

The NIS deal puts Russia in a unique position in the Balkans to expand its reach into the European energy market, said the European weekly New Europe.

Russian President Dmitry Medvedev said the deal marked a "new era" of relations between Belgrade and Moscow. Serbia, for its part, said the agreement put the country at a regional advantage, bridging the gap between Russia and the European Union.

Serbian Economic Ministry Mladjan Dinkic, however, raised questions over the deal, saying the NIS sale was undervalued and included no explicit guarantees for South Stream, something Tadic, the Serbian president, countered in televised statements.

"We are seeking to join the (European Union), and this will also be useful for Russia; now, with the signing of this contract, we will become part of an enormous energy project," he said.

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(e-mail: energy@upi.com)