Waiting for neighbourhood gas

Thousands of years ago, in the historic silk-route city of Baku on the banks of the Caspian Sea, ancients worshipped a phenomenon they could hardly comprehend: pillars of fire leaping skywards out of the ground. The flaming columns were in fact high-pressure natural-gas fields that had caught fire and could not be extinguished. We have traveled a long way since those times. Technology has enabled us to tame this gas, pipe it for burning in homes, offices and factories. More importantly, with the advent of the combined-cycle gas-turbine technology, humankind has learned to harness the full potential of natural gas, converting it into electricity, the most convenient form of energy. Being clean-burning, natural gas has acquired salience in a post-Kyoto world exercised over global warming caused by the indiscriminate burning of dirty fossil fuels such as coal and oil.

The ease with which natural gas can be transported by way of pipelines makes it essentially a regional or continental resource. While liquefaction technologies that allow for the fuel to be transported in containers have been around for several decades, and while the cost of liquefaction has been declining steadily over that time, liquefied natural gas (LNG) still accounts for no more than a tenth of the global gas trade. LNG remains an option only where pipelines cannot reach. The big gas consumers – the US and Europe – are crisscrossed by gas pipelines, those in the former carrying the fuel in from Canada and those in the latter from Russia, the North Sea and even Algeria. New pipelines are being built everywhere: the west-east pipeline in China, for instance, recently started supplying Shanghai with gas from Xinjiang, and the newly completed Blue Stream pipeline runs from Russia to Turkey under the Black Sea. Many other such lines are under construction in different parts of the world. For India, too, it is ideal that gas be supplied through pipelines from neighbouring countries, not least because the price of LNG is firmly linked to crude prices, which in the last two years have not only been volatile, but have distinctly moved to a more expensive bracket. Besides, once constructed, pipelines offer security of supply because piped gas, unlike LNG tankers, cannot be diverted by recalcitrant producer states to other markets.