Pakistan Cabinet Gives Final Approval to Iran-PAK Gas Pipeline

Pakistan’s Information Minister Qamar Zaman Kaira said today that the federal cabinet has given final approval to Iran-Pakistan (IP) Gas Pipeline Project. (The Nation, 30 January)

Kaira told reporters the cabinet‚ chaired by Prime Minister Raja Pervez Ashraf, also set up a four-member committee under Finance Minister to monitor work on the IP pipeline. The construction of the Pakistani side of the pipeline will be undertaken soon at a cost of $1.5 billion.

Kaira also announced that work is continuing on the proposed Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline.

Photo credit: Pakistan’s Information Minister Qamar Zaman Kaira (The Nation)

Zardari Cancels Iran Visit

Iran-Pakistan Gas Pipeline at Issue

A planned visit to Tehran by Pakistani President Asif Ali Zardari to seal a $1.5 billion Iran-Pakistan (IP) gas pipeline deal was unexpectedly cancelled on Friday amid mounting U.S. objections to the contract. (Financial Times, 9 December)

Iran has offered Pakistan $500 million to finance the long-delayed gas pipeline.

“It’s a feasible project for Pakistan. It’s the quickest route, the cheapest route where we can fulfill our energy needs,” said Asim Hussain, chief natural resources advisor to Mr Zardari. “But we are (concerned) about the sanctions. (Banking) transactions with Iran is a problem.”

The U.S. is pushing an alternative gas route known as Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline.

File photo: IRNA

Russia to Finance IP Pipeline, Pakistan Media

Pakistani Media have reported that Russia has agreed in principle to finance the $1.5 billion Iran-Pakistan (IP) gas pipeline project. The Express Tribune said this weekend that the Russian offer came after a presentation in Moscow by a Pakistani delegation over the details of the pipeline, gas volume and financing requirements.

Meanwhile, the Pakistani media is reporting that India is contemplating about re-joining the Iran-Pakistan gas pipeline project and thus reviving the original Iran-Pakistan-India (IPI) pipeline concept. Online quoted an unnamed Indian diplomat on Sunday that India had never abandoned the project; IPI "was merely gone down on the priority list.”

Analysts believe that India abandoned IPI due to the pressure from the US and was anxiously pursuing the Turkmenistan-Afghanistan-Pakistan-India (TAPI) project. But the TAPI pipeline is facing serious problems in securing financing.

Pakistan Calls IP Pipeline “Vital”

Pakistan’s Minister of Information Firdous Ashiq Awan said today that the Iran-Pakistan (IP) gas pipeline project is vital to Pakistan’s ability to solve its energy shortage. She added that Pakistan would resist against any foreign (U.S.) pressure regarding the issue [IRNA, 27 March].

The multi-billion-dollar planned gas pipeline would export 21.5 million cubic meters a day of the Iranian natural gas to Pakistan. IP was originally planned as IPI, with India being the third participant in the project. India pulled out last year.

The Iranians have already completed the construction of 900 kilometers of the 56-inch pipeline between the Asaluyeh gas fields on the Persian Gulf and the town of Iranshahr near the border with Pakistan. The Pakistanis, notwithstanding today’s remarks by the minister, have not yet begun any construction work on their territory. Pakistan has also announced its commitment to the rival Turkmenistan, Afghanistan, Pakistan and India (TAPI) pipeline project.

File photo: IRNA

Ahmadinejad in Islamabad

Ahmadinejad and Zardari Discuss Gas Pipeline, Oil Agreement

Iranian President Mahmoud Admadinejad met Pakistani President Asif Ali Zardari on Thursday in Islamabad ahead of a tri-lateral summit of the leaders of Iran, Afghanistan and Pakistan.

Pakistani press reported that during the meeting Zardari reiterated Pakistani commitment to complete the Iran-Pakistan (IP) gas pipeline [The Express Tribune, 17 February].

The proposed IP pipeline originally included India, but the Indians withdrew their participation and opted instead for the US-backed Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline. Iran has completed the construction of IP pipeline on its side, but the Pakistanis, despite their repeated expression of interest and commitment to the project, are yet to start any work on their side.

Iran has also offered Pakistan deferred oil payments, but that offer was quickly and unexpectedly met with a similar offer from Iraq. The Pakistanis are reportedly negotiating with the Iraqis to finalize a long-term oil contract.

Photo: iranian President Ahmadinejad (l.) with Pakistani President Zardari. Islamabad, 16 February. Photo: Press TV

Final Agreement on TAPI Pipeline Expected Soon

Afghan President Hamid Karzai reportedly had a successful meeting with his Turkmen counterpart on Wednesday on the status of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline. Separately, the Indian and Pakistani officials met on the same day and are very close to an agreement on a joint strategy on transit fees to be paid to Afghanistan. The Indian oil minister told reporters that there has been “considerable progress” in putting final agreements in place.

The 1,700-kilometer (1,050 mile) TAPI pipeline will transport over 30 billion cubic meters of gas annually from Dauletabad gas fields in southeast Turkmenistan. The Asian Development Bank (ADB) has estimated the cost of TAPI construction to be over $7.5 billion.

The main remaining stumbling bloc before the construction can begin is ADB's insistence that it would finance the project only if the pipeline operation is handed to a consortium led by a credible Western multinational to help guarantee its successful operation. ADB also seeks to have the Western-led consortium to participate in the development of the gas field, an arrangement believed to be opposed by Turkmenistan.

The previously planned Iran-Pakistan-India (IPI) gas pipeline will be the obvious victim of TAPI’s construction. The Indians pulled out of the project last year and the Pakistanis are under pressure to do the same. A quick start in TAPI’s construction will also relieve pressure on Pakistan to import gas from Iran.

Map: menasassociates.blogspot.com