Deep-Sea Energy Lifeline: India Fast-Tracks Oman Gas Pipeline Amid Hormuz Turmoil

• India is fast-tracking a USD 4.2 billion deep-sea pipeline from Oman to enhance energy security.

• Aims to reduce reliance on volatile LNG spot markets and Strait of Hormuz transit risks.

• Projected to supply 31 mmscmd amid rising domestic gas demand.

• Hormuz crisis exposed vulnerability to supply shocks and price spikes.

• Highlights India’s storage gap and strategic lag behind China.

  
  

India is moving swiftly to shield its energy supplies from global disruptions by reviving plans for a direct undersea gas pipeline from Oman. The initiative comes in the wake of the Strait of Hormuz crisis, which exposed the country’s heavy dependence on vulnerable maritime routes for liquefied natural gas (LNG) imports.

Estimated to cost around ₹40,000 crore (approximately $4.2 billion), the proposed pipeline would take five to seven years to complete if it receives the necessary approvals, according to officials familiar with the matter. The renewed urgency reflects mounting concerns within the government about supply instability and volatile global gas prices—risks that have become increasingly apparent in recent years.

Reducing Reliance on Spot LNG Markets

Senior officials indicated that the petroleum ministry plans to task public sector companies—including GAIL, Engineers India Ltd, and Indian Oil Corporation—with preparing a comprehensive feasibility study. This would build upon an earlier pre-feasibility assessment submitted by South Asia Gas Enterprise (SAGE), a New Delhi-based consortium.

Should the detailed study confirm technical and financial viability, India would initiate formal negotiations with Oman covering long-term gas supplies, funding mechanisms, and execution strategies.

Energy policymakers argue that India must reduce its reliance on LNG spot markets, which are highly sensitive to geopolitical tensions. A direct pipeline connection to West Asia would offer a more predictable pricing structure and minimize exposure to maritime choke points or transit-country risks. For a country striving to increase the share of natural gas in its energy mix, stability and affordability are critical.

India’s daily gas consumption currently stands at roughly 190–195 million standard cubic metres per day (mmscmd). Projections suggest demand could climb to 290–300 mmscmd by 2030. By the end of this decade, LNG imports alone may account for 180–200 mmscmd, underlining the scale of future requirements.

A Technological and Strategic Undertaking

The proposed Middle East–India Deep-water Pipeline (MEIDP) would span approximately 2,000 kilometres beneath the Arabian Sea, linking Oman directly to Gujarat’s coastline. Designed to transport about 31 mmscmd of natural gas, the pipeline would traverse waters near Oman and the UAE while steering clear of politically sensitive areas.

The broader Gulf region—encompassing Oman, the UAE, Saudi Arabia, Iran, Turkmenistan, and Qatar—holds an estimated 2,500 trillion cubic feet of natural gas reserves. Access to this resource base through a dedicated pipeline could significantly enhance India’s long-term supply security.

With projected depths of up to 3,450 metres, the project would rank among the deepest subsea pipelines ever attempted. Advances in offshore engineering and pipe-laying technologies have improved the project’s feasibility. According to submissions made by SAGE, a 3,000-metre test segment has already been laid to evaluate seabed conditions, though these claims have not been independently verified.

Hormuz Crisis: A Strategic Wake-Up Call

The urgency behind the proposal intensified after disruptions in the Strait of Hormuz earlier this year. In 2025, nearly two-thirds of India’s LNG shipments passed through this narrow corridor. When Iran effectively blocked the route in late February amid escalating tensions with the United States and Israel, global LNG supplies dropped sharply—by more than 20%—triggering dramatic price increases.

Asian spot LNG prices, tracked by the Platts Japan-Korea Marker (JKM), surged from a relatively stable $10–12 per MMBtu to as high as $24–25 per MMBtu during the crisis. The episode highlighted the vulnerability of depending on a single maritime gateway for critical energy supplies.

Officials now describe the diversification of supply routes as a matter of national security. The absence of alternative infrastructure leaves India exposed not only to supply interruptions but also to severe price shocks.

Storage Gap Compounds Risk

Another pressing weakness is the lack of strategic gas storage. While India maintains crude oil reserves, it has virtually no comparable buffer for natural gas. The country currently operates 22–24 LNG storage tanks at regasification terminals, with total capacity estimated at 2–2.5 billion cubic metres—equivalent to just 10 to 12 days of national consumption.

This limited storage restricts India’s ability to stockpile gas during periods of low prices and deploy it during emergencies, further increasing reliance on volatile global markets.

Learning from China’s Pipeline Strategy

India’s renewed pipeline push also underscores the contrast with China’s long-term energy planning. Over the past two decades, Beijing has constructed multiple cross-border gas pipelines, significantly reducing its exposure to maritime chokepoints.

China’s Power of Siberia pipeline began operations in December 2019 and is designed to deliver up to 38 billion cubic metres (bcm) annually at full capacity. A second line, Power of Siberia 2, is under negotiation and could supply an additional 50 bcm per year via Mongolia. Meanwhile, three existing pipelines from Turkmenistan provide a combined 55 bcm annually, with a fourth line under development that would raise total capacity to 85 bcm per year.

In parallel, China’s gas storage capacity is projected to reach 80 bcm by the end of 2026—enough to cover about one-fifth of its annual consumption. India, by comparison, lacks a similar strategic cushion.

Meeting Growing Domestic Demand

The Oman pipeline, if realised, could help address widening demand gaps across key sectors. The fertiliser industry alone requires between 46 and 50 mmscmd of gas, while city gas distribution networks are expanding rapidly to meet residential and transport needs.

For policymakers, the deep-sea pipeline represents more than an infrastructure project—it signals a strategic shift in how India approaches energy security. After decades of discussion, the Hormuz crisis appears to have transformed the proposal from a theoretical option into a pressing national priority.

Whether the ambitious project clears technical, financial, and diplomatic hurdles remains to be seen. But one message from the recent turmoil is clear: securing stable and diversified energy supplies is no longer optional—it is imperative.

Image from Economic times