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Australian company to gain from India-Iran pipeline

Paritosh Parasher in Sydney

Australian mining giant BHP Billiton is set to gain the most if the proposed multi-billion-dollar gas pipeline project to link India with Iran comes through.

But Australian media reports say the gas pipeline is not likely to become a reality as a result of a long history of hostilities between India and Pakistan.

Australian financial markets, however, are taking a deep interest in this linkage as BHP has been appointed by the Iranian government to lead a definite feasibility study in July on the project.

Market analysts here say BHP stands a good chance to play a major role in the construction of the 2,500-km long pipeline if the political uncertainty enveloping the project could be lifted.

The pipeline would link Iranian gas reserves to energy-starved industries on the Indian western coast. But what adds a serious element of uncertainty to this project is that a major portion of the pipeline would pass through Pakistan.

And that is the root cause of doubts arising in the minds of Indian skeptics as also of their counterparts across the border.

Indian fears about Pakistan political masters cutting off the gas supply in case of increased hostilities are stated to be not totally unfounded. The scenario looks bleaker considering the fact that Pakistan has not been enjoying very good relations with Iran in the recent past.

BHP's study is scheduled to be completed next year and the pipeline, if given the go-ahead by India, would take a further eight years for completion.

If the pipeline somehow takes a practical shape, BHP would also have another interest in it as the company would be in a position to export some gas from its newly commissioned Zamzama project in Pakistan's Sindh province to India.

BHP, which merged with international mining company Billiton, is already planning to expand the Zamzama gas project from an initial 70 million cubic feet of gas per day to 320 million cubic feet per day. But this would be dependent upon a new customer signing up in Pakistan.

There is a reported potential in the project to raise the supply to as much as 500 million cubic feet per day. BHP is not likely to face any difficulty in signing up the new customers as, like in India, there is insatiable demand for additional gas supplies in Pakistan.

BHP Billiton is also poised to buy into a $359 million petroleum project in Iran.

Australian media has been reporting for a while that the decision on this deal by the Iranian officials is likely to be announced any day now. The Australian company's involvement in the project would triple oil output from the offshore Forouzan and Esfandyar fields to 130,000 barrels per day.

Indo-Asian News Service

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