100 years of Russian gas for India

Yamal LNG Project in Siberia, Russia (File photo)

India is taking baby steps toward green energy. Two of India’s biggest business houses are spearheading it — Adani and Ambani groups. India has made several ambitious commitments at the Glasgow climate summit and two key pledges were that India’s non-fossil energy capacity will reach 500 GW by 2030 and the country will transition to net zero emissions by 2070. Sceptics doubt whether such timelines are realistic.

Meanwhile, the climate agenda itself has gone for a six with the  conflict in Ukraine weaponising energy security in a way that was unthinkable. In all probability, both green energy and zero emission targets will need an extended timeline, as the major industrial countries grapple with economic recession and high inflation. The momentum has been lost and the geopolitics of energy security will inevitably impact the calculus in ways not quite foreseeable. When an energy superpower such as Russia is treated as an outlier by the West, and China defers its climate dialogue with the US due to tensions over Taiwan issue, all bets are off. 

Meanwhile, natural gas, as a bridge fuel, is likely to outlast coal and oil in the age of global warming. Gas burns much cleaner than coal and this saves significant amounts of greenhouse gases emitted to the atmosphere. Europe calls gas “green energy”! Natural gas can indeed be a bridge to a carbon-free future, provided methane leaks are kept under check by installing reliable measurement equipment.

In fact, bp has predicted a strong future for natural gas, that by 2050 it would provide 22% of primary energy in their “Rapid” future scenario, compared with 45% for renewables. Above all, natural gas also manages to survive on the geopolitical stage, as is evident through the 6-month long Ukraine war. Simply put, it is a safe prediction that gas will stay fairly constant between 2020 and 2050, while oil and coal start declining in 2025 or thereabouts. 

We are now seeing inevitable price spikes as countries around the world compete for LNG shipments. The Asia-Pacific region is expected to account for half of the expected growth in global gas demand to 2025. However, the European Union’s commitment to phase out gas imports from Russia –- historically, its largest supplier –- is having global repercussions, as Europe’s surging demand for LNG draws in deliveries initially intended for other regions. 

On the other hand, according to a recent estimate in July by the International Energy Agency, Russian pipeline gas exports to the EU will fall by over 55% between 2021 and 2025— perhaps, in an accelerated case, by over 75%. 

This becomes an extremely favourable setting for India to work on a gas pipeline project from Russia. Significantly, last Tuesday, the prominent Russian daily Nezavisimaya Gazeta carried a report on the visit by the Russian gas Leviathan Gazprom’s CEO Alexey Miller to Ashgabat and his meeting with the Turkmenistan President Serdar Berdimuhamedov, which inter alia flagged that a pipeline project to send Russian gas to the South Asian region would be under consideration in Moscow. 

By the way, for the benefit of the uninitiated, following the transition in leadership in Turkmenistan in March, the Moscow-Ashgabat strategic axis has had a phenomenal makeover. On Monday, in Moscow, President Putin conferred Russia’s high honour of the Order of Merit of the Fatherland on Berdimuhamedov in a symbolic gesture signifying the Kremlin’s great appreciation for Turkmenistan’s gesture of spurning an overture from Brussels seeking additional gas supplies for the EU via Azerbaijan and Turkey to replace Russian gas! 

Gazprom chief Miller told Turkmen television in an interview that Russia intends to “continue large-scale purchases of Turkmen gas on a long-term basis.” Evidently, Moscow is mopping up the surplus Turkmen gas (after exports to China) to preclude the EU or other third parties from playing politics with it against Russia. In effect, it is a political gesture by Moscow that also reinforces the robust cooperation between the security agencies of the two countries, which is a vital brotherhood for both sides in today’s era of colour revolutions. (Ashgabat is not only a Caspian state but also has a 800-km long border with Afghanistan (which  runs from the tripoint with Iran to the tripoint with Uzbekistan.)  

The Russian daily hinted that Miller’s talks with President Berdimuhamedov in Ashgabat might have touched on an “overland route to Asian market” for surplus Russian gas, which used to be delivered to Europe previously. As the paper puts it, “And the way to Hindustan lies through Turkmenistan. There is a developed gas transportation infrastructure between it (Turkmenistan) and Russia.”

The daily cited an expert opinion that since Russia’s domestic market is already overstocked and the European market is “gradually closing” for Russian gas, and the supplies to China are being carried out anyway by both Turkmenistan and Russia, “coordination and joint activities for gas supplies to Pakistan and India no longer seem like something fantastic. Given the recent contacts between the authorities of the Russian Federation and Afghanistan on economic issues, there is more and more logic in Gazprom’s joint work with Turkmenistan on the implementation of TAPI (Turkmenistan-Afghanistan-Pakistan-India pipeline).”

The daily added that Turkmenistan will be open to the idea of Russia constructing a gas pipeline on its territory leading to the south for Russian gas to be marketed. It disclosed that Kabul is not only receptive but  negotiations have already taken place between Russian and Taliban authorities on building a pipeline to Afghanistan — and, an agreement is ready for signature.  

All this seems to be related to the recent visit by the Afghan Minister of Commerce and Industry with a delegation of officials from the finance ministry for weeklong consultations in Moscow in mid-August for supplies of wheat, gas and oil. Reuters also separately reported that talks are in the “final stages over the terms of a contract for Afghanistan to purchase gasoline and benzene from Russia.” 

Of course, a Russian gas pipeline project — instead of TAPI — is an entirely different ball game. Gazprom has enormous experience in building and operating pipelines. In effect, this idea presages Turkmenistan becoming an energy hub connecting the Russian gas grid with the vast South Asian market. 

Gazprom chief Miller told Tass yesterday that Russia has huge gas reserves for the next 100 years, and certain deposits will only be operational and producing gas by 2120! Miller explained that such grand panorama can be visualised today thanks to a new Russian gas production facility in the Yamal gas fields in northwest Siberia, which holds Russia’s biggest natural gas reserves, estimated to be in the region of 44 trillion cubic feet of gas and 550 million barrels of condensate. 

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