Iran-India Energy Cooperation Opens New Horizons

MEIDP can also usher in other, non-energy benefits, such as increased trade. For instance, thanks to MEIDP — with its associated development of Chabahar Port and the linking of Chabahar to Turkmenistan via railway — Iran, India and Turkmenistan alike can expedite their trade with Central Asia without needing to use the Bandar Abbas railway, and at a faster and cheaper rate.

Finally, MEIDP would not only be mutually beneficial to Iran and India, but also to their common friend on the Arabian Peninsula: Oman. In 2009, Iran signed a memorandum of understanding to build an undersea gas pipeline to export gas to Oman. On March 12, 2014, this memorandum was upgraded to a preliminary agreement between the two countries to build a 200-kilometer undersea pipeline worth $1 billion.

This project is expected to be finished in 2017 and would facilitate the export of about 10 billion cubic meters of gas to Oman annually. Of note, a September 2008 agreement signed between Tehran and Muscat stipulates that Oman will convert part of Iranian natural gas imports to liquefied natural gas and export it to world markets. Although the 2008 agreement focused on gas supplied from Iran’s Kish Island in the Persian Gulf, it could be expanded to the Iranian gas exported via MEIDP.

Oman currently has an LNG facility and imports gas from Qatar via the Dolphin pipeline. Muscat hopes that after MEIDP enters the operational phase, besides the increase in Oman’s revenue as a result of tariffs and exports, it will have more gas for its growing domestic use, and particularly for its power generation sector. Moreover, Oman could also use a portion of its income from MEIDP to cover its budget deficit.

In conclusion, while TAPI may sound the death knell to the IPI project, MEIDP is a promising initiative that would help secure mutually beneficial energy cooperation between Iran, Oman and India, and also paves the way for the expansion of broader trade and diplomatic cooperation — not only between the Middle East and the Indian subcontinent, but also with Central Asia.

No comments yet.

Leave a Reply