Long-awaited Gas Pipeline agreement has been finally inked by Iran and Pakistan. Both countries signed historic deal partly out of feeling of Islamic solidarity, to take Pakistan out of energy crisis, and partly to frustrate Western countries’ imposed isolation on Iran in the name of nuclear programme.
The gas pipeline is not the only one that will limit to Pakistan and it is not the only pipeline which is threatened by the US sanctions. In 1992, Tehran had offered assistance in the construction of a gas pipeline to carry Turkmen gas to Turkey and Western Europe through Iran. The idea of such a pipeline, costing $ 3 billion, upset Washington, which tried to sabotage it. Thus under the US pressure, it was announced that the plan was being held in abeyance since international bankers were unwilling to finance a project involving Iran. A fear was also expressed that Iran, for political reasons could turn off energy supplies to Turkey and Europe, thus playing with the future of the two.
In 1995, a reversal for America occurred when Turkish Prime Minister Necmettin Erbakan signed a $ 20 billion natural gas deal with Iran. This deal was scheduled to run for twenty-five years. A pipeline was to be laid to carry initially 3 billion cubic meters of Iranian gas annually, rising to 10 billion cubic meters in 2005.
Confident of their oil and gas wealth, Turkmenistan and Kazakhstan continued to defy Washington’s policy of economic boycott of Iran. In December 1997, Iranian President Muhammad Khatami and Turkmen President Niyazov inaugurated a pipeline to carry natural gas from Turkmenistan’s Korpeje gasfield to Kord-Kui in northeast Iran. Further to that, in June 1998, the National Iranian Oil Company invited bids for a $ 400 million contract for a 400-kilometer (250 miles) pipeline between the Caspian port of Babol Sar and Tehran, to carry oil supplied by tankers to Kazakhstan and Turkmenistan. The pipeline was designed to handle 200,000 bpd, with Iran exporting the same amount from its Gulf ports to the customers of Kazakhstan and Turkmenistan.
In July 2007, Iranian and Turkish energy ministers signed a memorandum of understanding under which Turkmen and Iranian gas would be exported to Europe through Turkey. Moreover, Turkey would also develop three later phases of Iran’s giant South Pars gas field of Tehran’s buyback scheme. This MoU was ‘a dream come’ true for Turkey as she was a pivotal country for the transfer of energy from one part of the world to the other. However, the document drew a quick condemnation from the US State Department. Like his predecessor Erbakan, Turkish Prime Minister Erdogan rebuffed Washington.
Iran-Pakistan (IP) Gas Pipeline is one of the projects in Iranian historical perspective. However, in this project, Pakistan is keeping high ambitions for the resolution of its energy crisis and as a result political stability. Pakistan is short of 4000 MW electricity which has impaired its already shabby economy. Power breakdowns have badly blighted the country’s economy by dawdling industrial production, deteriorating the country’s agricultural capacity and having a detrimental brunt on business. In a cyclical manner, laying off has resulted in declining purchasing power resulting in reduction of daily- wagers. Hence the poverty level is on the rise. The growing dependence on costly furnace oil, with $ 1 billion per year import, for the production of thermal power continues to raise electricity charges.
Pakistan is keeping high ambitions for the resolution of its energy crisis and as a result political stability.
Once the shortfall is compensated, Pakistan will regain political stability which will be supported by the strengthening of its political economy, enhanced industrial output, bringing back laid off workers, foreign investment and over and above shrink poverty level. The imported gas from Iran would allow the generation of additional 4,123 megawatts of electricity at cheaper rate. It will also restore the 2,232 megawatts of idle thermal power generation capacity that will help, in addition to the domestic gas, for other uses such as manufacturing fertilizer and supplying gas to domestic consumers. While Pakistan would pay Iran $3 billion a year, it would reduce its oil imports by $5.3 billion, resulting in a net annual reduction in energy imports by about $2.3 billion.
The energy crisis in Pakistan has become a question of life and death for the survival of the state. Hence success of the IP project is the dire need for the survival of the country. Once, successful, India which is already facing energy crisis, will give a second thought to rejoin the project what was originally called Iran-Pakistan-India (IPI) Pipeline. After an exchange of MFN status, it will be another milestone in providing the two arch-rivals to resolve their mutual suspicions and conflicts via economic means. Thus it would be another Confidence Building Measure (CBM) that will result in true sense of ‘A Peace Pipeline’. No doubt, a successful project attracts the attention of every country interested in cashing the booty of a ready-made venture. China can join the project via Pakistan which will in turn bring significant economic benefits from the deal for Pakistan.
The US threat of sanctions against Pakistan is a definite bluff. However, The US can use Saudi Arabia and Qatar to exert pressure on Pakistan to abandon the IP project.
However, there are serious hurdles in the way of IP becoming functional, the most important being a stiff opposition from the US. The US wants to strangulate the Iranian economy through sanctions and imposed isolation on Tehran. While brandishing the threat of sanctions against Pakistan, we need to gingerly weigh their possible effects. At the moment, the US is about to withdraw its troops from Afghanistan and the cheapest way out is via Pakistan. Secondly, peace and reconstruction of/in Afghanistan is in its absolute embryonic stage. Pakistan- being a frontline ally of the US during the war on terror in Afghanistan played a pivotal role in the execution of the US objectives in the region. Be it a Bonn Conference in 2011 or negotiations with the Taliban, it has always been seen that any effort in Afghanistan minus Pakistan is doomed to fail. Therefore, Pakistan’s help is a prerequisite in restoring long-lasting peace in the post-2014 Afghanistan. Thirdly, in Pakistan, pro-American sentiments are extremely rare. The US sanctions will add fuel to the fire. Hence, the US threat of sanctions against Pakistan is a definite bluff. However, the US can use Saudi Arabia and Qatar to exert pressure on Pakistan to abandon the IP project. Still, this will depend on what they offer in reciprocation to an already pursued and half completed project.
Gone are the days when the extra-territorial major powers’ Cold Wars used to take place in this region. The animosity between Iran and the US is a bilateral issue which must not hinder the development process of other regional countries. Pakistan and India are arch-rivals. But the US ignored this fact and signed a nuclear deal with India. Similarly, any pressure by the US on Pakistan for the IP project will tantamount to the negation of its own trend of bilateralism that she set in this region. For an animosity between Iran and the US, Pakistan must not bear the brunt. Everybody for oneself and God for us all.