India is in talks with Russia, the world’s largest oil producer, to build a pipeline that will bring crude oil to the country on the lines of the TAPI pipeline, a senior official from the external affairs ministry told FE.
Ajay Bisaria, joint secretary (Eurasia), said the issue was discussed between the two sides during PM Manmohan Singh’s visit to Russia in late October. India has already broached the idea of a crude oil pipeline with Kazakhstan, and this could be extended to Russia.
The plan is to route crude oil from Russia to Kazakhstan to Uzbekistan and then follow a parallel route through the Turkmenistan, Afghanistan, Pakistan and India (TAPI) pipeline.
Total investment for the Russia-India pipeline could go upto $30 billion. The TAPI pipeline is a natural gas pipeline and, therefore, the proposed crude oil pipeline cannot be connected to it.
India currently buys very little crude oil from Russia and therefore wants to increase its oil procurement from the country. According to the Indian embassy website, mineral fuel and oil imports from Russia stood at $176 million in 2012. It did not provide the 2013 numbers.
Russia is largely focused on supplying oil to Europe and other Asia Pacific countries and China. “Now we want to build a north-south land route to buy more oil from Russia,” said Bisaria.
Most hydrocarbon pipelines from Russia and Central Asia are on an east-west axis. The pipeline will provide a new route to South Asia for hydrocarbons.
Shipping oil from Russia is an expensive proposition and, therefore, even ONGC Videsh (OVL), which has a stake in the Sakhalin-1 project, prefers to sell it in other markets. The success of the pipeline from Russia to India could hinge on the TAPI pipeline as a part of it will run parallel to TAPI. According to oil minister Veerappa Moily, the TAPI pipeline is expected to be ready by August 2017.
