The IP Gas Pipeline project has been under discussion between Iran and Pakistan since 1994. Iran signed a preliminary agreement with Pakistan in 1995. Later on, Iran suggested extending the pipeline from Pakistan into India and in February 1999 signed a preliminary agreement with India as well. The project was termed as Iran-Pakistan-India (IPI) Gas Pipeline and many experts described it as a Peace and Prosperity Gas Pipeline.
However, India withdrew from the project in 2008 after signing a nuclear deal with the US on the pretext of overpricing and security issues. Nevertheless, Pakistan and Iran signed a final agreement on the IP Gas Pipeline at a meeting held in Ankara on 16 March 2010. The agreement between Pakistan and Iran was for the import of 750 million cubic feet daily (mcfd) of natural gas with a provision to increase it to one billion cubic feet per day. The agreement for the supply of gas from Iran to Pakistan through this pipeline for 25 years also stipulated that if Pakistan did not complete its part of the pipeline by 2014 it would have to pay a daily penalty of one million dollars to Iran until its completion.
Korean envoy promises all efforts to enhance direct trade with Faisalabad This development was not well received by USA and in January 2010, it asked Pakistan to abandon the pipeline project promising to provide her assistance for the construction of a Liquefied Natural Gas Terminal and importing electricity from Tajikistan through Afghanistan’s Wakhan Corridor.
Notwithstanding US pressure the work on laying the Pakistani section of the project was officially launched by the Presidents of Iran and Pakistan on March 11 2013. However due to the continuation of US and UN sanctions against Iran, Pakistan could not go ahead with the construction of the pipeline on its side. Iran has all along been urging Pakistan to fulfill its commitment failing which it might take the matter to the International Court of Arbitration. Pakistan has invariably been asking Iran to extend the deadline expressing its commitment to the project.
The US position on the project has not changed. Donald Lu assistant secretary of state told the Congressional panel during a hearing last Wednesday that the Biden administration has set a goal to prevent the construction of Iran-Pakistan gas pipeline and has communicated to Pakistan about its red line on Tehran’s nuclear ambitions. He further said “If they get in bed with Iran, it will be very serious for our relationship. The administration was tracking the pipeline developments and he fully supports the efforts of the US government to prevent this pipeline from happening. We are working towards that goal and the administration is in consultation with the Pakistani government on the pipeline issue. He also told the panel that Pakistan has not expressed any desire to the US for any waiver of American sanctions that would certainly result from such a project.
No Bowing Down A spokesperson of the State Department speaking to the media on Tuesday also reiterated the stance that Donald Lu had indicated during the congressional hearing. He said“ We always advise everyone that doing business with Iran runs the risk of touching upon and coming in contact with our sanctions, and would advise everyone to consider that very carefully”
Nevertheless, the interim government at the fag end of its tenure decided to construct a portion of an 80 KM pipeline within its territory to pre-empt potential legal disputes with Iran in international courts. Pakistan feared an $18 billion penalty if it lost the case in the international court. The Petroleum Minister Musadiq Malik has said that the government of Pakistan has decided to seek a waiver of US sanctions on the IP Gas Pipeline Project. However, he also reiterated that the implementation of the project could entail five kinds of US sanctions which Pakistan could not afford to bear.
Judicial Accountability It is worth mentioning that the US had allowed waivers from sanctions to eight countries including India. However these waivers were withdrawn by Trump administration in April 2019 after rejecting the agreement with Iran. The administration explained that it would grant 180-day SRE waivers from the Iran oil sanctions to eight countries namely China, India, South Korea, Japan, Italy, Greece, Taiwan, and Turkey – thus allowing these countries to continue importing Iranian oil while transitioning to new suppliers.
As far as Pakistan is concerned it is mind-boggling to note why successive Pakistani governments never thought of going ahead with the request for a waiver and completed the project while the waiver stood valid for at least six years? The materialization of the project would have tremendously helped energy-starved Pakistan to tide over the energy crisis and run the industrial wheels.
Security and Stability The chances of the implementation of the IP gas project had surely improved after the signing of the nuclear deal between Iran, US and P5 countries in Geneva on 24 November 2013. Soon after this development the then minister for Petroleum and Natural Resources Khaqan Abbassi visited Iran and met his counterpart on 9th December wherein the two countries resolved to go ahead with the completion of the project. But no substantive progress was made during that period till the time sanctions were re-imposed.
Resultantly the completion of the IP Gas Pipeline remains as elusive as ever. The only way of making progress on the project is a waiver from the US as indicated by the minister for Petroleum. Whether the US would accede to Pakistani request for a waiver remains a million-dollar question in view of the US position explained by Donald Lu during the discussion in the Congressional panel.
Cartoon The proposition seems very difficult at the moment. The animosity between Iran and the US has gained more intensity in the backdrop of conflict in Gaza and the alleged support of Iran to Hamas and Hizbollah. Until and unless due to a dramatic turn of events there is any kind of détente between the US and Iran the US is not going to relax sanctions against Iran and the IP Pipeline will remain a casualty of global geo-political and geo-strategic considerations.
Pakistan will have to look for other alternative avenues to fulfill its energy needs and try to convince Iran to keep the project under wraps till the time the situation becomes conducive for its completion or have the venture wrapped up through an amicable settlement between them.
Malik Muhammad Ashraf
The writer is a freelance columnist. He can be reached at ashpak10@gmail.com
IP Pipeline Remains Elusive
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29.03.2024
The IP Gas Pipeline project has been under discussion between Iran and Pakistan since 1994. Iran signed a preliminary agreement with Pakistan in 1995. Later on, Iran suggested extending the pipeline from Pakistan into India and in February 1999 signed a preliminary agreement with India as well. The project was termed as Iran-Pakistan-India (IPI) Gas Pipeline and many experts described it as a Peace and Prosperity Gas Pipeline.
However, India withdrew from the project in 2008 after signing a nuclear deal with the US on the pretext of overpricing and security issues. Nevertheless, Pakistan and Iran signed a final agreement on the IP Gas Pipeline at a meeting held in Ankara on 16 March 2010. The agreement between Pakistan and Iran was for the import of 750 million cubic feet daily (mcfd) of natural gas with a provision to increase it to one billion cubic feet per day. The agreement for the supply of gas from Iran to Pakistan through this pipeline for 25 years also stipulated that if Pakistan did not complete its part of the pipeline by 2014 it would have to pay a daily penalty of one million dollars to Iran until its completion.
Korean envoy promises all efforts to enhance direct trade with Faisalabad This development was not well received by USA and in January 2010, it asked Pakistan to abandon the pipeline project promising to provide her assistance for the construction of a Liquefied Natural Gas Terminal and importing electricity from Tajikistan through Afghanistan’s Wakhan Corridor.
Notwithstanding US pressure the work on laying the Pakistani section of the project was officially launched by the Presidents of Iran and Pakistan on March 11........
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