Pakistan sees gas pipeline as tactical tool to force concessions out of Iran and U.S. - expert
Azerbaijan, Baku, March 6 /Trend S.Isayev/
While Iran considers the Peace Pipeline a strategic project, Pakistan considers it a tactical instrument to force concessions out of Iran and the U.S., American Enterprise Institute Research Fellow Ali Alfoneh told Trend.
The expert was commenting on the latest news about Pakistan and Iran moving forward with the multi-billion-dollar gas pipeline between the two countries.
Iran and Pakistan signed the Gas Sale and Purchase Agreement (GSPA) in June 2009. The Government of Pakistan has already determined that the imported natural gas from Iran would provide the cheapest and most suitable fuel for power generation.
It has been estimated that 750 mmcfd gas would help generate around 4,000MW of electricity, besides providing job opportunities in the backward areas of Balochistan and Sindh. Iran has already laid the 56-inch diameter pipeline for a distance of 900 km from Assaluyeh to Iran Shehr.
The remaining 200 km to bring the pipeline to the Pakistani border are likely to be completed in the next two years. Pakistan, on its part, is planning to complete its segment of the pipeline by the end of 2014.
Currently, Pakistan is facing severe energy crisis, believes that the multi-billion dollar gas pipeline is its best bet to partially resolve the problem.
Despite the Iran-imposed sanctions, and negative statements from the U.S. regarding the pipeline, Pakistan is determined to go further.
Alfoneh noted that governments of both Iran and the U.S. see the gas pipeline project issue differently.
"To the leadership in Tehran, Pakistan says Islamabad is ready to continue the project ignoring the U.S. sanctions but can't afford it," Alfoneh said. "Therefore, Islamabad demands ever greater Iranian finance of the entire project."
"To the United States, Pakistan says Islamabad would have no choice but to rely on the Islamic Republic should the United States reduce military aid to Pakistan," he added.
Recently, it has been reported that Iran agreed to provide $250 million loan for the Iran-Pakistan gas pipeline project.
Minister for Petroleum and Natural Resources Dr Asim Hussain said that Pakistan was asking for a $500 million, however Iran agreed to only half of that sum.
Pakistani delegation should be visiting Iran soon, sometime next month, to discuss and finalize the deal about the gas pipeline project.