Energy Sector - 2

[Naresh]

<b>Ravish Ji :</b>

One can talk in terms of supplementary supply of Water, Crude Oil and its Refined Products, Coal etc. as it is moved to various parts of the world.

Natural Gas usage is inhibited by a narrow “market” i.e. LNG can be received by about 15 to 20 Countries and Natural Gas by countries in the vicinity of the Gas Fields. For Long Distance Pipe Lines the cost of Transportation is many time the cost of the Gas at the Departure Point in the Producing Country.

The LNG Trade is again a dedicated trade i.e. The Supplying nation builds LNG Trains (Liquefaction Units) and LNG Loading Harbours & Terminals for a set number of Customers. I believe in Qatar’s case the whole production of one LNG Train is dedicated to India.

Again the LNG receiving country builds a Dedicated Harbour and Receiving Terminal along with a Re-Gasification Plant for the Long Term contracted LNG Supply - contracts of 25 Years are the norm but one does see shorter contracts - especially in today’s Economic Climate.

As such even if a Pipe Line carrying a supply limited to supplementary source of supply is “blown up” then one cannot supplement it by importing LNG as there is no LNG Liquefied and stored in Tanks for “Speculative Trading”.

Thus it is a crying shame that the Oman to West Coast India Deep Sea Pipe Line envisaged in 1991-1992 is still not acceptable with the Mandarins of the Indian Government Establishment.

Today it is the necessity of the hour to import Natural Gas from Iran or Qatar to the West Coast of India as the Final cost of the Pipe Line will be lesser than a Land Pipe Line.

Reasons : There are no “Transit Charges, No Security Expense, No Maintenance Expenses” as the Oman to West Coast of India Deep Sea Pipe Line is on an average 2000 Metres water depths.

Additional advantage is that a Deep Sea Pipe Line can be Insured on the Insurance Market but a Pipe Line though Pakistan cannot be Insured and will have to be covered by Pakistan’s Sovereign Guarantee - a Guarantee that would not be worth the paper it is written on.

I fully agree with you on the High Cost of Electric Power Supply based on Furnace Oil and may be twice or even thrice as much if based on High Speed Diesel Oil and this source of Supply must be restricted to a minimum if not obviated.

Thus my Basic Query as to why there are no protests in respect of the envisaged Natural Gas Pipe Lines via Pakistan remains unanswered.

Cheers <!--emo&:beer--><img src='style_emoticons/<#EMO_DIR#>/cheers.gif' border='0' style='vertical-align:middle' alt='cheers.gif' /><!--endemo-->