Iran Has Some Hope for Gas Deal With Pakistan

EghtesadOnline: Following the contract signed between Iran and Pakistan in 1999 to complete a gas pipeline to help address Pakistan’s electricity problems, Tehran has fulfilled its commitments regarding construction of the pipeline inside Iranian territory.

News ID: ۷۴۷۹۹۱

27 July 2019

But Islamabad has failed to implement execute its share, and negotiations are underway to convince Pakistan to get the job done, managing director of the National Iranian Gas Export Company said.

“US economic sanctions on Iran have overshadowed the project. Pakistan says that due to the restrictions, it cannot finance the construction of the pipeline on its territory. We insist that the sanctions are not a big obstacle and they can do it,” ILNA quoted Mehran Amir-Moeini as saying.

The US resanctioned Iran’s oil industry and banks last year after President Donald Trump abandoned the landmark international nuclear deal signed by Iran and six world powers, Financial Tribune reported.

The Iran-Pakistan pipeline project - also called Peace Pipeline - is a 1,957 km pipeline intended to supply much-needed natural gas from Iran’s South Pars fields to Pakistan's two major cities -- Karachi and Multan.

During the past years, it was reported that Pakistan was in talks with China and Russia to invest on building the major pipeline, but nothing happened.

If it was not for sanctions, Pakistan would have implemented the project, the NIGEC chief said. Analysts and experts in Pakistan have concurred that the pipeline is very much in the interest of that nation and its energy security.

785 Km Shy

Tehran has completed building the 1,172km of pipeline from Asalouyeh in the south to the joint border in the east and awaits Islamabad to take up construction of its share of the pipeline (785 km).

However, Pakistan could have put an end to its procrastination and completed the pipeline on its territory in the 17-month period it had after Iran's nuclear deal took effect in early 2016 and before the US abandoned the international agreement and imposed new restrictions on Tehran.

Needless to say, nothing was done in the period, not even a kilometer of pipeline was laid!

Nevertheless, Pakistan has recently expressed willingness to complete the long-delayed gas pipeline project that is crucial for the energy-hungry nation of 213 million people.

Pakistan's Prime Minister Imran Khan instructed his foreign minister, Shah Mahmood Qureshi, in May to take necessary measures to implement the long-delayed energy project.

Pakistan needs gas to feed its power plants and help improve its power sector that is long struggling with chronic electricity shortages.

No Rival

Regarding the Turkmenistan-Afghanistan-Pakistan-India gas pipeline project, Amir-Moeini said it is unlikely to pose a challenge to the IP project.

TAPI is a planned 1,800-kilometer stretch of pipeline planned for transferring natural gas from Turkmenistan to India.

It is extremely difficult, if not impossible, to normalize ties between the two belligerent states (Pakistan and India), he said, playing down the prospect of energy collaboration between the two rivals whose ties are overshadowed for decades by border disputes, mistrust and past military conflicts.

Moreover, the pipeline also faces security risks in Pakistan and Afghanistan, a hotbed of militant groups.

“In the current situation, we are not worried about TAPI. It is a much longer pipeline than the Peace Pipeline. While we have a contract with Pakistan and our pipeline has reached the Pakistani border, no contract has been signed for TAPI and construction has not started yet,” the official was quoted as saying by ILNA.

According to Pakistan's Dawn newspaper, over 140 million Pakistanis either have no access to the already overstretched power grid or suffer over 12 hours of load shedding daily.

The average power deficit is 4,000 megawatts and nearly 57 million cubic meters per day in the natural gas sector.