A Gas Opec?
It's all about supply, demand and transit. At best the IPI is a potential solution to the Kashmir issue. But at worst it's yet another point of friction.
Putin paid special attention to cooperation "in building facilities for gas production and transportation in India and the adjacent region" (emphasis added). This is a reference to the highly politicized US$7 billion project for a 2,100-kilometer Iran-Pakistan-India gas pipeline.
Putin's visit to Delhi came closely on the heels of the latest round of negotiations over the price of gas for the Iran pipeline project. According to a new formula proposed by Iran, the cost of gas will translate at the Pakistan-India border as $4.93 per million British thermal units (mBtu), plus $1.5 per mBtu that India would have to pay to Pakistan as a transit fee. Indian officials have since expressed optimism that the signing of India's $145 billion gas mega-deal with Iran might take place by June.
In geopolitical terms, it could be the focal point of a new power-sharing axis, perhaps under the auspices of the SCO:
In other words, we're talking seriously for the first time about the prospect of a gas market uniting Turkmenistan, Iran, Pakistan, India and China. This is where a breakthrough in the protracted negotiations over the Iran-Pakistan-India pipeline project could become a defining moment for energy politics in Eurasia.
Russia is not in competition with Iran in tapping the South Asian market for gas. It is expedient for Russia if Iran gets deeply engaged in the Asian market (which includes two energy guzzlers - China and India) and, that, too, with Russian equity participation in the actual construction of Iran's pipeline to South Asia. That could lead to Gazprom's participation in the highly lucrative distribution and retailing of Iranian gas in Pakistan, India and China.