Gas Pipelines—Politics and Rivalries

In 2012, the International Energy Agency (IEA) in its ‘World Energy Outlook’ said that the world was entering a ‘Golden Age of Gas’. With its lower carbon-emitting properties, gas seemed poised to claim its rightful place in the global energy mix as a bridge between polluting hydrocarbons and green renewables. Moreover, it has all the ingredients to make it as worthy a contender in the energy geopolitical game as did oil a few decades ago. Like oil, gas reserves are located in a few countries, many of which are landlocked and hence have to transport the gas either through pipelines or in specialised tankers after liquefaction. While liquefied natural gas (LNG) trade was less susceptible to geopolitics, the huge capital costs involved gave pipelines a commercial advantage and hence were a preferred option till recently. However, the nature of the pipeline gas trade being what it is, it ties the recipient states to the host country or countries, making them vulnerable to disruption and lending themselves to carrier monopolisation. As a result, the host–client relationship is not always governed purely by commercial considerations, and is often used as a strategic tool, employed by the exporter to bend the clients to its will.