x Abu Dhabi, UAE Thursday 20 July 2017

The 'peace pipeline'

The Iran-Pakistan-India pipeline, a project subject to intermittent negotiations over the last 14 years, made a significant advance last weekend as Iran and Pakistan signed an accord. Russia's Gazprom has expressed interest in participating in the project. India withdrew from the talks last year over unresolved disputes on prices, transit fees and security issues. China has shown interest in joining the project and last year said it would import about 1 billion cubic feet a day from Pakistan if India opted out.

The Iran-Pakistan-India pipeline, a project subject to intermittent negotiations over the last 14 years, made a significant advance last weekend as Iran and Pakistan signed an accord. Although international financial institutions have yet to provide backing, Russia's Gazprom has expressed interest in participating in the project. India withdrew from the talks last year over unresolved disputes on prices, transit fees and security issues. China has shown interest in joining the project and last year said it would import about 1 billion cubic feet a day from Pakistan if India opted out. "Natural gas imported from Iran through the Iran-Pakistan-India pipeline will generate 5,000 megawatts of electricity for Pakistan, advisers said. "Asim Hussain, the top energy adviser to Islamabad, warned the project was imperative as his country receives about half of the current natural gas needs," UPI reported. "Hussain led a delegation to Tehran during the weekend to hammer out agreements on the long-delayed IPI project, dubbed the Peace Pipeline." Dawn reported: "When completed the 2100-kilometre pipeline will carry 750 million cubic feet of gas per day from Iran's South Pars fields to Nawabshah in Sindh. This gas will be used only for energy generation and help produce 5000MW of electricity for this power-starved country. The price agreed upon for the moment ie 80 per cent of the oil price, may not be as low as initially bargained for. But in the absence of alternatives this appears to be the most feasible offer. With oil prices falling as they are these days, Pakistan should benefit. "There are, however, two aspects of this project that must be kept in mind. One is directly linked to Pakistan's security concerns in Baluchistan. Fears have been expressed that the turmoil in Baluchistan will threaten the security of the pipeline since a great length of the 1,000 kilometres inside Pakistan passes through that province which borders Iran. "Islamabad could convert this factor to its advantage if it can ensure that in the construction of the pipeline indigenous labour is hired and the gains of the economic activity inevitably generated by projects of such magnitude are focused on Baluchistan for the benefit of its poverty-stricken people. The peace pipeline will begin functioning in another five years. This period should be used by Islamabad to address the Baluchistan problem in earnest to find a just solution that redresses the grievances of the province's citizens." RFE/RL said: "Not much has been heard about the Iran-Pakistan-India (IPI) pipeline for some time, but that all changed on the sidelines of a regional summit that brought together Iranian President Mahmud Ahmadinejad and Pakistani President Asif Ali Zardari in Tehran on May 24. "At a signing ceremony, the two leaders hailed the prospects of a pipeline that would start in the Iranian city of Asalouyeh, travel to Pakistan, and could eventually end in India. "But there are some major obstacles to overcome before any Iranian gas actually crosses the border into Pakistan - and even more before that gas can be routed to India. "The first major question is where the money will come from. "The first leg of the plan is to build a 2,100-kilometer long pipeline from Iran's South Pars gas field into Pakistan - at an estimated $7.5 billion. The next step would be to build a 600-kilometer extension that would go on to India. "But while a rival gas-pipeline project - the Turkmenistan-Afghanistan-Pakistan-India (TAPI) - is supported by the Asian Development Bank, the IPI does not have any backing from international financial institutions. Furthermore, TAPI is not as vulnerable to the financial or political opposition that IPI could experience due to the involvement of Iran, whose nuclear program has made it a pariah in the international community. "Complicating matters for both projects is that they are to be routed through Baluchistan. Considering that Baluch nationalists have already blown up domestic gas pipelines on the Pakistani side of the border in their fight for greater autonomy from Islamabad, their stance on a new pipeline from Iran (or Afghanistan) could be easily guessed." Press TV reported: "Gazprom is interested in participating in a pipeline project to carry Iranian gas to Pakistan, a Russian daily cites company and government officials as saying. " 'We are ready to join the project as soon as we receive an offer,' Russian deputy energy minister Anatoly Yankovsky told the Kommersant daily. "The Russian newspaper cited another top Russian official as saying that for Moscow the pipeline is a means to redirect Iranian gas from competing with Russian gas exports to Europe. " 'This project is advantageous to Moscow since its realisation would carry Iranian gas toward South Asian markets so that in the near future it would not compete with Russian gas to Europe,' Kommersant quoted the government official as saying." In Asia Times, Syed Fazl-e-Haider said: "The project, when initially mooted in 1994, was intended to carry gas from Iran to Pakistan and on to India. New Delhi withdrew from the talks last year over repeated disputes on prices, transit fees and security issues. China has shown interest in joining the strategic gas pipeline project and last year said it would import about 1 billion cubic feet a day from Pakistan if India opted out. "Pakistan has faced severe criticism from the US over any kind of economic deal with Iran. The change of stance from the Pakistani government and the pace of developments at the project suggest that the strong US opposition has softened, Dawn newspaper reported, citing official sources. "The former George W Bush administration in Washington strongly resisted the IPI and had exerted considerable pressure on both India and Pakistan to abandon the project. The Bush White House instead supported purchase by South Asian nations of energy from the Central Asian republics contiguous to Afghanistan. Geopolitical considerations and continuing security issues in Afghanistan work against that from materialising. The present US administration of President Barack Obama has not yet given its views on the IPI project." Reporting on the summit which brought together the leaders of Iran, Pakistan and Afghanistan in Tehran, The New York Times said: "President Mahmoud Ahmadinejad of Iran suggested that the United States was the main problem [in the region] when he described 'others who are alien to the nations and culture of our nations'. It was a not-too-subtle swipe, but still one that Washington's allies from Pakistan and Afghanistan did not rebut. That served as another sign that Iran was increasingly seen as less of a threat to the West, and the region, than the prospect of the Taliban's controlling Pakistan or Afghanistan. " 'If we can save Pakistan and Afghanistan from these problems, from extremism,' President Hamid Karzai of Afghanistan said in comments broadcast in Iran, 'then such trilateral meetings are meaningful.' "Mr Ahmadinejad, Mr Karzai and President Asif Ali Zardari of Pakistan signed an agreement - called the Tehran Statement - in which they committed to work together to fight Islamic extremism and stop drug smuggling across their borders. Though the declaration did not outline specific action, it served as a sort of bookend to changes in regional dynamics that began after the Sept 11, 2001, attacks, with the United States-led invasion of Afghanistan in late 2001 and of Iraq in March 2003. "The summit meeting also served as proof that Western efforts to isolate Iran over its nuclear energy programme, through unilateral and United Nations Security Council sanctions, have given way to more pragmatic regional concerns."

pwoodward@thenational.ae