Following multiple economic sanctions against Iran by the US as Pakistan had lost interest building the Iran-Pakistan gas pipeline. Pakistan on Friday informed Iran in writing that it cannot execute the Iran-Pakistan gas pipeline project as long as Tehran is under United States sanctions regime.
According to Mobin Saulat, the managing director of Inter State Gas, “Under present US sanctions on Iran, it is impossible to execute the IP [Iran-Pakistan] gas pipeline project and we have conveyed it to them [Iran] in writing recently.”
It is a 7.2 billion dollar project and the Iranian Government had connected its Pars Gas fields with the Iranian Balochistan and natural gas is available to the domestic consumers in Iranshahr, the second largest city of Iranian Balochistan after Zahedan.
In February this year, a new round of negotiations were launched between Pakistan and Iran after Tehran formally issued a notice to Islamabad and said it was moving an arbitration court against Pakistan for failing to lay down the pipeline in Pakistani territory in the timeframe stipulated in the bilateral agreement.
“We have time till August this year to legally respond to Iran’s legal notice and settle the issue through negotiations,” Saulat said. “We are hopeful to find a solution through discussions with Iranian officials.”
Sault further said, Pakistan was still committed to executing the project, but only if international sanctions on Iran were lifted.
“We cannot risk US sanctions by going ahead with the project as America has clearly said that anybody who will work with Iran will also be sanctioned,” he said.
The Iranian gas pipeline is around 100 kilometers away from the Pakistani Balochistan and Pakistan Government will have to start work on the pipeline after completing the paper work and planning of the gas route.
A few years back, Pakistan concluded separate and exclusive agreement with Iran to buy Iranian gas by building the pipeline from borders of Pakistani Balochistan to Nawabshah and beyond.
Fearing US sanctions and unquestionable influence of the United States on those multi-national corporations, banks and international development finance institutions, both Iran and Pakistan decided to build their own part of the gas pipeline to avoid economic sanctions on this project.
The fears proved to be correct and the US is targeting Pakistan and using pressure tactics to abandon the Iran gas pipeline project only to punish Iran.
It is a fact that Pakistan had no other workable option but to depend on the Iran gas pipeline project to meet its growing energy needs. On the other hand, the US is determined not to permit Iran and its partners to complete the gas pipeline under the present security climate in the region and the US will continue to mount pressure on all concerned, including on the Government of Pakistan, to shelve the project unless Iran surrenders to US dictates.
We, in these columns, had been blaming the Government at the Centre for its shortsighted policies by not conserving energy resources, mainly precious Sui Gas and allowed it’s to waste at a massive level for the past half a century or more.
Iran had completed the construction of gas pipeline on its territory and brought it to the borders of Pakistan to start construction work. Iran had handed over the contract to build the pipeline to an Iranian Project. At the last movement, Pakistan is backtracking from the project and least interested to ward off the energy crisis in foreseeable future.
With this shortsighted decision of the Government to shelve the project, Balochistan and Sindh will suffer more giving a support to the idea that gas produced in Balochistan and Sindh should be used by the province to avoid the energy shortfall in future. Similarly, Pakistan’s relations with its immediate neighbour Iran will be strained considering Pakistan as a proxy of United States and Saudi Arabia. Secondly, Pakistan will have to pay heavy fine to Iran for breaking the agreement and not honouring international commitment giving an impression that Pakistan is an unreliable economic partner for any major deal.