Al Ghurair Investment's plan to build a pipeline for the Iran-Pakistan-India gas network is no longer on the table, but a top company official said that the Dubai-based family-run firm is still looking for other pipeline project opportunities and is holding initial talks with a Canadian company.
"It is a very difficult [project] because it [runs through] Iran, India and Pakistan and there are diplomatic and political sanctions [involved]," Essa Al Ghurair, Vice-Chairman of Al Ghurair Investment, told Emirates Business.
"We were not able to wait. We have been waiting for a long time so went on to do other projects. It is no longer on the table."
TransAsia Gas International, a part of the Al Ghurair Group, previously planned to hold a 40 per cent stake in a $1.3 billion (Dh4.77bn) joint venture to build a pipeline bringing gas from Turkmenistan or Iran to Pakistan and India. A consortium of five to 10 companies from these countries was to be established.
As that plan has now fallen through, Al Ghurair has begun to look for partners to build the concept of a gas pipeline. The original planned project, expected to benefit India and Pakistan – countries that do not have sufficient natural gas to meet their growing demand – has been under constant scrutiny from the US government.
In September last year, Mehr news agency quoted a Pakistani diplomat as saying, "India definitely quit the IPI (India-Pakistan-Iran) gas pipeline deal in favour of the Indo-US civilian nuclear agreement for energy security." Iranian officials, however, said India was yet to make an official declaration.
In January 2010, the US asked Pakistan to do the same and abandon its plan of receiving piped natural gas from Iran in order to isolate that country.
"You need a lot of government support in this area because energy is a very sensitive area," Al Ghurair said. He admitted the firm has not yet created a niche in the pipeline segment but is still looking for opportunities in hydrocarbon transportation, though on a smaller scale.
"Unless you have a niche, it is not possible. The IPI deal is big and we need huge financing. Unless you have a competitive edge, you won't be able to do anything.
"Now we are looking at a project with a Canadian company that involves transporting gas from one area to another," he said. But the high level of risk involved in this investment is making a decision difficult.
"It could have high rewards, but the risk is also high because it is a new technology. We've looked at it many times, but we take one step forward and one step backward," he said.
Al Ghurair Investment is one of the leading international conglomerates in the Middle East with businesses in diverse sectors including construction, food, property and commodities. The group has additional partnerships and joint ventures in printing, retail and the energy sectors.