Expert names main obstacle for Iran-Pakistan pipeline project

Expert names main obstacle for Iran-Pakistan pipeline project

Baku, Azerbaijan, May 25
By Elena Kosolapova – Trend:

Pakistan has a strong interest in gas pipeline from Iran, which would satisfy its gas needs and in the future would generate income for Pakistan as a transit country for Iranian gas supplies to India and China, Dr. Hooman Peimani, Senior Consultant on energy security and related issues at Independent Consultancy in Canada believes.

However, Pakistan's close ties with the US, which opposes this pipeline, is the main obstacle to its realization, Peimani told Trend by email.

“In reality, the main problem [of Iran-Pakistan pipeline project] is not the lack of funding for its construction, but the lack of will on the part of the Pakistani government for its close ties with Iran's enemy, the US, and thus Pakistan's inability and unwillingness to offend Washington by importing gas from Iran. Unless this issue is settled one way or another, the pipeline cannot be realized in the near future,” Peimani said.

The analyst noted that there is no international sanction to prevent the construction of the Pakistani section and Iran, China and Russia have all declared their readiness to help Pakistan in this regard.

Peimani stressed that Iran-Pakistan pipeline is a necessary project for Iran in order to increase its gas exports, which is now very small for the country having the world's largest conventional gas reserves (according to BP).
He went on to add that the project is also necessary for Pakistan whose domestic gas reserves are inadequate and rapidly depleting.

The expert believes that as Pakistan's neighbor whose section of the pipeline only needs a short connecting line to its border, Iran is the only logical piped gas supplier to Pakistan as the proposed alternatives (onshore Turkmenistan-Afghanistan-Pakistan-India Pipeline (TAPI) and offshore Qatar-Pakistan) are unrealistic and phenomenally expensive.

“Pakistan's close ties with the US, its second largest foreign aid provider after China, is the main reason leading to its engagement in the TAPI,” Peimani said.

He noted that once realized, the project will have a major impact on the region for its satisfying Pakistan's gas needs and help it increase its domestic electricity generation now way below its requirements.

Moreover, the pipeline will bring about the possibility of exporting Iranian gas not only to India, but also, more likely in the short-run, China, which is working on increasing its piped gas imports from friendly countries without relying on any one single supplier to decrease its reliance on LNG imports via sea tankers when it lacks naval superiority to ensure the long-term security of their sea routes, the analyst said.

“Once it is realized, its extension to India and China will be a distinct possibility as both China and India have good ties with Tehran and want to import Iranian gas while Pakistan, as a poor country with a growing need for expensive imported fossil energy, will have every reason to reduce the financial burden of such imports. Generating income as a transit country for Iranian gas exports to India and China will be a logical and feasible means for this purpose,” Peimani said.

According to the expert, the positive impact of the pipeline project on its ties with India and China - further consolidating its ties with China - its long-term ally and now the largest foreign investor, and removing tensions from the ties with India, will be another major incentive for Pakistan to extend the pipeline to these countries.

“The pipeline could make Iran, Pakistan and China much closer to each other and incline them to work on regional issues in concert, while helping remove tensions in Indian-Pakistani relations once both sides have economic benefits for such development,” Peimani said.

Iran-Pakistan gas pipeline project (also called Peace pipeline) worth $7.5 billion has been discussed for years. Iran has already completed the construction of its section of the pipeline from the South Pars field to Pakistani border. Pakistani section of the pipeline is still not ready and Islamabad explains the delay by the lack of funds.

Follow the author on Twitter: @E_Kosolapova

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