Big Mis­take?

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.

Southasia - - Contents - By S.G. Ji­la­nee

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.

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