Pipe­line Pol­i­tics

The Iran-Pak­istan Gas Pipe­line may be an elec­tion stunt but how ben­e­fi­cial will it prove in ad­dress­ing Pak­istan’s en­ergy woes?

Southasia - - Contents - By Huza­ima Bukhari & Dr. Ikra­mul Haq

Crit­ics of Pak­istan Pres­i­dent Asif Ali Zar­dari al­ways find them­selves be­wil­dered and flab­ber­gasted by his shrewd and un­pre­dictable stance in home pol­i­tics. This time how­ever, he seems to have suc­cess­fully shocked in­ter­na­tional play­ers as well. In spite of warn­ings from Wash­ing­ton, Pres­i­dent Zar­dari joined Ira­nian Pres­i­dent Mah­moud Ah­madine­jad on March 11, 2013 to launch the ground­break­ing work on the 781-kilo­me­tres long Iran-Pak­istan pipe­line pro­ject on the Pak­istani side of the bor­der. The Iran-Pak­istan (IP) gas pipe­line pro­ject, ini­ti­ated in 1995, has faced per­pet­ual op­po­si­tion from the United States and its al­lies. Speeches by heads of both the coun­tries at the cer­e­mony, reaf­firm­ing their com­mit­ment to go ahead with the pro­ject have cre­ated an up­roar in all Western cap­i­tals with Wash­ing­ton be­ing quick to ex­press its reser­va­tions and even

threaten Pak­istan with pos­si­ble sanc­tions.

Vic­to­ria Nu­land, spokesper­son of the State Depart­ment, said: “We have to see what ac­tu­ally hap­pens. We’ve heard this pipe­line an­nounced about 10 or 15 times be­fore in the past, and if it re­ally ma­te­ri­alises, Iran Sanc­tions Act would be trig­gered.” Dub­bing Pak­istan’s move “in the wrong di­rec­tion at the wrong time,” she said it came as a sur­prise “when we are sup­port­ing large-scale en­ergy projects in Pak­istan, plan to add some 900 megawatts by the end of 2013 and fur­ther gen­er­a­tion through ren­o­vat­ing plants at Tar­bela and Mangla, as well as mod­ern­iz­ing oth­ers plants and build­ing new dams at Sat­para and Go­mal Zam.”

The United States has op­posed the pro­ject since its in­cep­tion and suc­cess­fully wooed In­dia to pull out of it through the civil nu­clear deal. Af­ter In­dia’s exit, Iran and Pak­istan signed an ac­cord in June 2010 to con­tinue with the pro­ject. The govern­ment of Pak­istan an­nounced in Oc­to­ber 2011 that “our de­pen­dence on the Pak-Iran pipe­line is very high and there is no other sub­sti­tute at present to meet the grow­ing de­mand of en­ergy.” This state­ment ir­ri­tated the Unites States, which has been plead­ing and pro­mot­ing the Turk­menistan- Afghanistan- Pak­istanIn­dia (TAPI) gas pipe­line pro­ject.

In a smart move, Pres­i­dent Zar­dari dur­ing his visit to Turk­men cap­i­tal, Ash­ga­bat, to at­tend the Nau­roz Fes­ti­val in March, said, “Pak­istan at­taches great im­por­tance to the TAPI and wants to see the pro­ject built as soon as pos­si­ble.” Dur­ing his meet­ing with Turk­men Pres­i­dent, Dr. Gur­ban­guly M. Berdimuhame­dov, he said Turk­menistan could help Pak­istan meet its grow­ing en­ergy needs. In re­turn, Pak­istan could pro­vide a trade cor­ri­dor to Turk­menistan—over land and through its ports. This neu­tral­ized the im­pres­sion that Pak­istan had tilted to­wards Iran. By stress­ing the need for co­op­er­a­tion amongst the states of the re­gion to pro­mote eco­nomic de­vel­op­ment and peace, Pres­i­dent Zar­dari suc­cess­fully coun­tered Wash­ing­ton’s diplo­matic on­slaught.

Pak­istan, the com­ple­tion of the pipe­line, is ex­pected to re­ceive 21.5 mil­lion cu­bic me­ters of nat­u­ral gas on a daily ba­sis. Faced with an ex­tra­or­di­nary en­ergy cri­sis, Pak­istan is in dire need of nat­u­ral gas as its short­age has caused mis­ery to mil­lions of Pak­ista­nis on ac­count of its de­mand as a do­mes­tic fuel and clo­sure of in­dus­tries. Iran has al­ready con­structed more than 900 kilo­me­tres of the pipe­line on its side. The Tehran-based Tad­bir en­ergy de­vel­op­ment group has un­der­taken the en­tire en­gi­neer­ing pro­cure­ment and con­struc­tion work for the first seg­ment of the pro­ject. It will also carry out the sec­ond seg­ment of the pro­ject and ex­tend a fi­nan­cial loan of $500 mil­lion to Pak­istan. Iran and Pak­istan are op­ti­mistic about com­plet­ing the IP gas pipe­line by De­cem­ber 2014.

TAPI, a 1,680 kilo­me­ter gas pipe­line pro­ject, is backed by the Asian De­vel­op­ment Bank (ADP), with the po­ten­tial of bring­ing 3.2 bil­lion cu­bic feet of nat­u­ral gas per day (bcfd) from Turk­menistan’s gas fields and then pass­ing near the cities of Herat and Kan­da­har in Afghanistan and then cross­ing into Pak­istan near Quetta and link­ing with ex­ist­ing pipe­lines at Mul­tan and then cross­ing into In­dia. TAPI was ini­tially de­signed to pro­vide gas to Pak­istan through Afghanistan. In­dia joined in April 2008 and re­cently Bangladesh has also ex­pressed its in­ter­est in be­com­ing a part of TAPI. The Pak­istan cabi­net ap­proved the Gas Pipe­line Frame­work Agree­ment (GPFA) for TAPI on Oc­to­ber 27, 2010. On Novem­ber 13, 2011, Pak­istan and Turk­menistan ini­ti­ated the Gas Sales and Pur­chase Agree­ment (GSPA). This multi-national pro­ject is ex­pected to be op­er­a­tional by 2016.

The U.S. and its al­lies want Pak­istan to re­nounce the IP gas pipe­line and pur­sue only TAPI. This is not only un­ac­cept­able to Pak­istan and Iran, but China and Rus­sia have also se­ri­ous ap­pre­hen­sions about the in­ten­tions of the U.S. and its al­lies in the re­gion. Gi­ant Western com­pa­nies en­joy­ing the main fi­nan­cial con­trol over Turk­menistan’s gas re­serves de­sire a monopoly over the mar­kets. The tus­sle over IP and TAPI is not a mere eco­nomic bat­tle - it has geopo­lit­i­cal di­men­sions as well. The ap­point­ment by the U.S. of Afghan-born Zal­may Khalilzad as a spe­cial en­voy to Afghanistan, nine days af­ter the US-backed in­terim govern­ment of Hamid Karzai took of­fice in Kabul, un­der­scored the real eco­nomic and fi­nan­cial in­ter­ests at stake in the U.S. mil­i­tary in­ter­ven­tion in Cen­tral Asia. Khalilzad was in­ti­mately in­volved in the long-run­ning U.S. ef­forts to ob­tain di­rect ac­cess to the oil and gas re­sources of the re­gion, largely un­ex­ploited but be­lieved to be the sec­ond largest in the world, af­ter the Per­sian Gulf, through TAPI and other sim­i­lar projects.

Bee­lam Ramzan in IP Pipe­line: En­ergy Cor­ri­dor says that “re­place­ment of im­ported fur­nace oil by Ira­nian gas in heavy in­dus­tries will re­sult in an­nual sav­ings of bil­lions.” This pro­ject, she says, “will help ex­pand bi­lat­eral trade in in­valu­able en­ergy re­sources, ob­vi­ously of much sig­nif­i­cance to en­ergy-de­fi­cient Pak­istan.” Ex­press­ing con­cern over the se­cu­rity sit­u­a­tion in Balochis­tan, she con­cludes: “con­struc­tive en­gage­ment with the U.S. on the is­sue is cru­cial for the suc­cess of this pro­ject.”

An­jum Ibrahim in Pipe­line Pol­i­tics, ob­serves: “those en­am­ored of Pres­i­dent Zar­dari’s po­lit­i­cal acu­men that ac­counted for his sur­vival for five years see the IP gas pipe­line in­au­gu­ra­tion as killing two birds with one stone: to show to the elec­torate that the party lead­er­ship is de­fy­ing the U.S. and at the same time send­ing a mes­sage that the en­ergy cri­sis would now be re­solved be­cause of his per-

sonal in­ter­ven­tion.”

Ac­cord­ing to Ibrahim, “Pun­jab Chief Min­is­ter Shah­baz Sharif has ac­cused the “Zar­dari gang” of de­fer­ring the sign­ing cer­e­mony till a mere few days be­fore the govern­ment com­pleted its ten­ure and not five years ago to cre­ate com­pli­ca­tions for the next govern­ment.” This, she claims, “re­veals that not only is Shah­baz Sharif aware of the po­lit­i­cal di­men­sions of the cer­e­mony, to which he was in­vited but never at­tended, but also is not sure if the next govern­ment would get a green sig­nal from the es­tab­lish­ment and is then blamed for not im­ple­ment­ing a good pro­ject due to a pro-U.S. stance.”

Whether Pres­i­dent Zar­dari has been play­ing pol­i­tics with the IP gas pipe­line is de­bat­able. But one thing is cer­tain - that com­ple­tion of the pro­ject would be a great chal­lenge for Pak­istan’s civil and mil­i­tary lead­er­ship. The stakes are too high, keep­ing in view the for­eign-backed in­sur­gency in Balochis­tan where the ma­jor part of the pipe­line lies. The next govern­ment, as very aptly ob­served by Ibrahim, “would be damned if it un­der­takes it with the U.S. threat­en­ing reprisals and damned if it doesn’t with the pub­lic an­gered over its aban­don­ment.”

Pur­suance of IP by Iran and Pak­istan would cer­tainly deal a se­ri­ous blow to the U.S. and its al­lies as they scram­ble to grab oil and gas re­sources of this re­gion, ben­e­fit­ing multi­na­tional cor­po­ra­tions that fi­nance the Western rul­ing elites. Ac­cord­ing to Eric Draitser (Balochis­tan: Cross­roads of Proxy War), it should not be over­looked that “China’s in­sa­tiable thirst for oil and gas makes the de­vel­op­ment of pipe­lines from Cen­tral Asia, Iran, and else­where in­valu­able to them. The Iran-Pak­istan pipe­line, the Turk­menistan-Afghanistan-Pak­istan-In­dia pipe­line, and other projects all serve to in­crease the im­por­tance of Balochis­tan in the eyes of the Chi­nese. Ad­di­tion­ally, the Chi­nese-funded Pak­istani Gwadar Port is the ac­cess point for Chi­nese com­mer­cial ship­ping to the In­dian Ocean and on to Africa. With all of this as a back­drop, one can be­gin to see just why Balochis­tan is so sig­nif­i­cant to the Chi­nese and, con­versely, why the United States and its al­lies seek to desta­bi­lize it.”

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