Our cover story this month attempts to investigate the Iran-pakistan Gas Pipeline project and explore its drawbacks and benefits for key players in the South Asian region.
Pakistan faces an acute crunch in the power sector, both in electricity and gas. Endeavors to meet electricity needs through rental power projects have been unsuccessful due to various factors, including corruption.
Gas is another energy source. Pakistan’s own supplies from the Sui gas field fall considerably short of the requirement. Majority industries in the country therefore, face three to four day gas outages a week. Consequently, many have shut down businesses, because export orders cannot be met. According to reliable data, around 321 industrial units have been shut down in Balochistan and Khyber- Pakhtunkhwa during fiscal 2010. The country’s fertilizer industry is also facing an acute shortage of gas, which results in increased imports of Urea. This has an adverse impact both on the economy because it costs the government billions in the form of subsidy on imports and the agriculture sector as a whole.
Pakistan has therefore been exploring ways to import gas. One source of supply is Iran; the other is Tajikistan. The idea for a gas pipeline from Iran was conceptualized in the early 1990s. Negotiations started in 1994. The IranPakistan gas pipeline would be a direct pipeline without having to pass through any other country.
Originally, the plan was for developing an Iran-pakistan-india pipeline, known as the Peace Pipeline, but India promptly withdrew after signing the deal with the US for civil nuclear power.
However, on 16 March 2010 Iran and Pakistan signed an agreement on the pipeline, in Ankara. The total length of the pipeline will be approximately 2,775 km, of which 1172 km will be in Iran and 1000 km in Pakistan. The radius of the pipeline is 28 inches, making its diameter 56 inches and circumference approximately, 176 inches. Estimated to cost US $ 7.5 billion, the pipeline will start from Asalouyeh (South Pars gas field) and pass through Bandar-abbas and Iranshahr till it reaches Khuzdar, Balochistan. At Khuzdar, a branch would extend to Karachi while the rest of the main pipeline would continue through Sui to Multan.
Pakistan is to lay a 781 km pipeline in its territory and the project would be completed by December 2014. The initial capacity of the pipeline will be 22 billion cubic meters of natural gas per annum, which is expected to later rise to 55 billion cubic meters. The pipeline aims to export 21.5 million cubic meters of Iranian natural gas to Pakistan
every day or 8.7 billion cubic meters per year.
To spite Iran, the United States asked Pakistan in January 2010, to abandon the project. In return it offered assistance for a liquefied natural gas terminal and promised to aid the import of electricity from Tajkistan through Afghanistan’s Wakhan Corridor.
Nonetheless, Pakistan finalized the Iran-pakistan gas pipeline deal in June 2010. And in July 2011, Iran announced that it had completed construction of its section. Because now it is Pakistan’s turn to move ahead, the United States has once again become active and has put the spanner in the works with its old formula.
In November, US Ambassador to Pakistan Cameron Munter, in a statement to Press TV, repeated the old refrain, saying, “Pak-iran gas pipeline is not a good idea…. however, the plan to get gas from Turkmenistan is a better idea.”
In a riposte to this uncalled for meddling, Pakistan’s Information Minister Firdous Ashiq Awan said on Friday 26 November that Islamabad will not accept any dictation regarding its internal affairs from any foreign country, adding that exporting gas from Iran is in the country’s best interest.
The pipeline project promises to pull Pakistan out of the current energy quagmire. And while it is clear that it alone cannot act as our savior and we would have to explore our reserves as well, there is no question that it would go a long way to relieve the current energy crunch.
The government is already bearing Rs43 billion as the cost of subsidy on imported urea and this is expected to go up to Rs125 billion over the next two years if local gas supply is not enhanced or an alternate is not found. The government will also save on imports of furnace oil, which is currently being used in increased quantities to fuel power generation because of the shortage of gas.
US opposition to the pipeline is simply out of spite for Iran. It has already imposed various sanctions on Iran both directly and through the UN. It has tried to line up the Arab States in the Gulf as well as Saudi Arabia against Iran. It has been rattling sabers and even threatening to attack Iran, either directly or through its protégé, Israel. Opposition to the pipeline is just another attempt to “strangulate” Iran’s economy.
Pakistan government’s stand is therefore quite laudable. The country, instead of being led by the USA,
US Ambassador to Pakistan Cameron Munter, in a statement to Press TV, repeated the old refrain, saying, “Pak-iran gas pipeline is not a good idea…. However, the plan to get gas from Turkmenistan is a better idea.”
should demonstrate that it is capable of standing on its own two feet and independently decide what is a “good idea” or a bad idea, instead of being lectured by people from the other side of the world. Nonetheless, standing up to the US would require nerves of steel. And only time will tell how far our government can withstand the pressure.
But American opposition is only a part, and perhaps a minor part, of the problem in the way of the project being successful. The major part is the risk to the security of the pipeline as it passes through Balochistan. The province is in a state of simmering insurgency. Every so often, rebels blow up the Sui gas pipeline and commit other acts of sabotage in addition to bomb explosions and violent attacks on security personnel.
Others who may try to sabotage the project include Jundullah, which has carried out a number of bloody attacks on Iran’s military in neighboring Siestan and Lashkar-e-jhangvi, which is another sworn enemy of Iran and involved in target killings of Hazaras in the province.
The Balochistan Chief Minister Nawab Mohammad Aslam Raisani, though, has been upbeat about the project. He recently announced that his government has agreed to give land for the project. The land to be allocated is in the districts of Gwadar and Lasbella.
It is difficult to predict the political repercussions of the pipelines’ development. However, the situation would crystallize only after Pakistan has started work on the pipeline.
Iranian President, Mahmoud Ahmadinejad and his Pakistani counterpart,
Asif Ali Zardari finalize the Iran–pakistan gas pipeline project.