Indo-Iran Gas Pipeline

In 2009, after the Mumbai attacks, India withdrew from the pipeline, stating security reasons.

The history of the Iran-Pakistan-India gas pipeline is an uneasy one. Talks have stalled due to costs and mistrust between hostile neighbours in the conflict-ridden region. Recently, India showed interest once again and has proposed resuming talks. 

The possibility of having a gas pipeline that connected Iran to India via Pakistan was first officially proposed in the 1990s. A study by the Institute of Peace and Conflict Studies states that the idea was suggested earlier, in 1989, by Ali Shams Ardekani, acting deputy foreign minister of Iran, and RK Pachauri of The Energy Research Institute. Iran welcomed the idea, but India, due to its cold relations with Pakistan, didn’t.

Discussions for the $7.5 billion pipeline began in 1994. In 1999, India and Iran signed a deal to extend a pipeline already proposed from Iran to Pakistan. The latter would provide logistical support and could divert some gas for its own use, besides being paid $580 million in transit fees. The pipeline would originate from the Assaluyen gas field in Iran, pass through Multan in Pakistan and finally connect to India’s HBJ pipeline. 

By 2007, India and Pakistan agreed to pay $4.93 per million British thermal units (mmbtu). This came after an agreement that Iran would supply gas at $3.2 per mmbtu. Not long after, Tehran revised the rate, saying it would cost India $8.3 per mmbtu. There was also a transit cost of $1.1-1.2 per mmbtu. In 2009, after the Mumbai attacks, India withdrew from the pipeline, citing security and costs as reasons. But Pakistan and Iran signed the deal, and soon after, Iran declared that it had constructed 1,000 km of the 1,100 km portion on Iranian soil. India once again showed interest in May 2010, keen to address its rising energy needs. 

While the pipeline is often seen as a way to make Indo-Pak relationships taste of candy-coloured rainbows, analysts have warned that to run a crucial pipeline through Pakistan is to ask for trouble.

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