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Shri Mani Shankar Aiyar , Minister of Petroleum has called upon increased cooperation between India and Iran in the Hydrocarbon sector not only for the development of this region but beyond the shared continent. Addressing the Iran and Middle East Gas Forum at Tehran today, the Minister said that given the disproportionate importance of fossil fuel in the development of the global economy, what the nations do in the oil and gas sector would decisively impact on the larger goal of an Asian resurgence. In so far as our bilateral relationship in hydrocarbons is concerned, India’s demand and Iran’s supply potential are such that Iran could easily become our most important supplier and India could easily become Iran’s most important buyer, not only in oil, but certainly in the area of natural gas. In many ways, oil is past its hey-day and it is gas that is set to take oil’s place of predominance in the ranking of fossil fuels. It is felt that what petroleum was to the 20th century, natural gas will be to the 21st; the Minister said and pointed out that there is more gas around the soil with many significant end-uses for which gas is an equal or even superior substitute with better transmission technology using pipelines.
Shri Aiyar reiterated the capacity of India for exporting surplus output of petroleum products to Iran. India is in a position to assist Iran in refurbishing refineries and in undertaking greenfield refinery projects. India can be of assistance in establishing and running oil tank farms in Iran, as was being done in Sri Lanka. At the tail-end of the downstream process, many countries in our neighbourhood are beginning to discover in India a partner in marketing – indeed, the Lanka Indian Oil Company, which runs petrol and diesel outlets in Sri Lanka, has just floated the most successful Initial Public Offering ever in the history of the Sri Lankan capital market and India is ready to participate in the oil sector marketing with Iran
In the field of natural gas, the country has been considering LNG in an oil-for-gas deal that links the purchase of LNG to a Participating Interest in Exploration & Production, as well in a second deal that links investment in gas exploration and liquefaction to a long-term contract for buying LNG. However, the initiatives that have been taken by the two countries in this regard since 2003 need to be placed in the context of developments in the natural gas sector since the United Progressive Alliance government took office in India under Prime Minister Dr. Manmohan Singh in May 2004. Government has pledged to ensure Energy Security for the energy-deficient India. If India is to attain and sustain the goal of 7-8 per cent growth per annum over the next 20 years, the demand for natural gas is going to grow to at least 400 million standard cubic metres per day, Shri Aiyar said.
As of now, our domestic production is under a hundred million standard cubic metres a day. Present indications are that it would be doubled over the next two decades. Since that would leave the country import-dependent to the extent of 50 per cent of its requirements, the highest priority was going to be to attract investment in gas sector that would improve domestic availability. But it would only be realistic to recognise that however much the entrepreneurial and technological genius of foreign investors and our hydrocarbons investors and experts might enable the country to expand domestic production base, India’s import requirements would be over 50 million tonnes a year by the end of the strategic document in the hydrocarbons sector, Hydrocarbon Vision 2025.
It is that potential demand which makes Iran our single most important prospective source of supply of natural gas and India, potentially, Iran’s most important customer. The other key customers would be China and, possibly, Japan. But because India is accessible by pipeline while China and Japan will be purchasing most, and perhaps all, of their gas requirements as LNG, India has the potential of becoming in the immediate future Iran’s most important trading partner in natural gas.
India would be hosting a meeting of Principal Asian suppliers and principal Asian buyers of crude on January 6, 2005 for a preliminary exchange of views on the possibility of creating an Asian Oil Community by bringing together the principal producers of West and South East Asia and the principal buyers of South and East Asia. The meeting is being organised with Kuwait and the International Energy Forum; the Minister informed. The broad theme of the New Delhi meeting is going to be stability, security and sustainability through mutual interdependence in the Asian oil economy. This meeting will be complemented with another meeting involving Central and North Asian suppliers. For, with the prospect of East Siberian oil reaching the Pacific coast and Caspian oil directly reaching the Arabian Sea, and perhaps the Red Sea via a pipeline from the eastern Mediterranean coast, all of Asia would be being networked into the world’s largest source and market for investment and trade in hydrocarbons, the Minister added.
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