Indian security agencies don't want China in TAPI

Vol 14, PW 25 (16 Jun 11) People & Policy

ExxonMobil and Chevron might be acceptable bedfellows for India but Chinese companies are definitely not welcome in the proposed TAPI gas pipeline, warns India’s apex intelligence body, the National Security Council Secretariat (NSCS).

PETROWATCH learns the NSCS, which analyses information from India’s external intelligence gathering agency, the Research & Analysis Wing (RAW), and from its domestic Intelligence Bureau (IB) agency, told the oil ministry in February it wants no Chinese company either as a member or sub-contractor of the TAPI pipeline consortium. Not surprising, as RAW was founded soon after India fought a bitter border war in 1962 with China, with whom Delhi continues to have a ‘love-hate’ relationship.

The NSCS is concerned about the potential threat of Chinese saboteurs ‘tampering’ with the 1700-km proposed TAPI gas pipeline, and disrupting gas supplies to India. Yet the oil ministry says these demands from India’s security establishment are impractical and unworkable, as Indian companies ONGC Videsh and GAIL will together take a 10% stake in the consortium, at most.

Whichever privately owned company buys a majority stake will control the pipeline project. “We won’t have operating or financial control,” says an Indian official.

“So how can we impose these conditions on the other three countries when China has good relations with them” He adds a US or Chinese company will most likely buy a majority stake in TAPI, as companies from these countries “have money and their finance costs are lower”. Chinese companies could also be sub-contracted to lay the pipeline efficiently.

Oil ministry officials believe the NSCS is getting unnecessarily paranoid about threats to the TAPI project. “TAPI is not like the proposed pipeline from Iran to Pakistan,” says an official.

“It won’t be laid by participating countries but by a private consortium with commercial interests - that’s the biggest safety mechanism.”