Pak-Iran Gas Pipeline

The Pak-Iran gas pipeline project was signed by the Petroleum Secretaries of both countries in the historical city of Istanbul. According to the agreement, Iran will provide 750 million cubic feet gas to Pakistan daily and Pakistan will be able to get gas till 2 years according to this agreement. This gas will be pumped daily from Iran and 1000 mega watt electricity can be generated because of this. This project will be completed by 2014. Iranian gas will come through Balochistan

Physical survey will complete within a year and Inter Estate Company will lay the pipeline from Paris gas field to Nawab Shah. The agreement will be valid till 25 years and the cost involved amounts to seven billion dollars. Iran has the world’s largest gas resources after Russia .However there were certain obstacles like sanctions by the West, political agitation and construction delays which slowed its development as an exporter

Large gas reserves were discovered in Iran in 1988. This motivated the Iranian Government to export natural gas and earn foreign exchange. The dearth of energy in the neighboring Pakistan and India promised good markets for this venture. In 1995, Pakistan and Iran signed a preliminary agreement for a natural gas pipeline. Later Iran proposed this pipeline to extend to India. Because of this gas pipeline Pakistan would have a huge annual income as transit fees.

Many other resources of energy were available like domestic coal and hydropower. The question arose why both countries opted for natural gas. The proper justification can be the fact that there were large resources of natural gas in the immediate neighboring countries. The fact remains that natural gas is a clean and cheap source of energy. Therefore as compared to other alternatives it is a preferred source.

At the end of 1999, General Pervez Musharraf visited Iran and discussions were held on the pipeline project. In 2000 Iran expressed keen desire to complete the project speedily. It also gave Pakistan the incentive of additional transit fees in case pipeline was completed within three years. The project was planned since the 1990s and originally it was extended from Pakistan to its old rival India .But India was hesitant not to join this pact because of certain reasons. There was a distant factor regarding Pakistan. Then there were security concerns regarding gas interruptions in case of any conflict with Pakistan. Iran agreed that in case Pakistan cuts supply to India, Iran will immediately cut off gas supplies to Pakistan and Iran will supply an equal amount of Liquefied natural gas (LNG) to India at the same price.

Another reason can be the fact that our rival India does not want that Pakistan should get a regular source of income in the shape of transit fees, (app $500-700 a year) for gas to be transported through its territory. India did not participate in talks since 2008. Thus he showed a negative response and the project delayed. This was detrimental to Iran and Pakistan. Still other reason might be the American pressure on India for not joining this project.

Successful implementation of this project will not only increase the credibility of Pakistan’s government but also entail positive gains for us with reference to mutual economic independence. 900 kilometer pipeline is expected to meet the energy crisis in Pakistan that is going to mar the development of Pakistan. Cheap and reliable energy resource in the garb of this gas pipeline will meet the growing energy demands of both Iran and Pakistan.

The gas pipeline will build up the mutual trust between the two countries. This may change the nature of regional politics in South Asia. Politico-social discourse between Iran and Pakistan will be transferred through these CBMs and economic collaborations. Meager economy will improve and modernize in this way Pakistan badly needs gas and electricity .Our industries are terribly suffering because of this reason. Pakistan did not bow down to American pressure. America had strict pressure on Iranian gas pipeline.

Because of low gas supply for domestic and commercial uses there were huge economic crisis, political turmoil and it also cast a slur on the popularity of democratic government. The power generation is affected. There is a prominent low production. The quality of work is marred. All these factors in turn lead to inflation and the resultant failure in competing in the global world. Industrialization, rapidly rising urban population, hyper info-transmission age, increased energy demands and associated with them was the greater ratio of both the country’s population to primary energy net.

Indeed the decision on this agreement was direly needed. Although Pakistan has large reservoirs of natural gas, yet the widening gap between energy demand and supply went on growing. This gap could be bridged only by import of natural gas through pipeline. Likewise Pakistan used to import oil for meeting its energy needs. Import bill amounted to almost 3 billion dollars in the fiscal year 2004. Such type of spending will be drastically minimized through import of cheap natural gas. This measure will also attract FDI (foreign direct investment). The healthy environment for investment will be provided in this way by the government .The positive image of Pakistan will be uplifted abroad. The confidence of international community will enhance. These types of agreements will have inherent tendency to pave way for regional reform. Bilateral relations between two countries will also invite co-operation on other key issues and will definitely exercise a positive influence.

Pakistan’s geo-strategic location is above board and it is a geographical compulsion for any pipeline from the West to pass through the Pakistani territory on land off shore. There will be cheaper gas for domestic needs. The additional gas will be available to each country for future needs without taxing the domestic reservoirs. There are very fair chances of improved trade and economic relations with Iran.

Critics fear that there can be a risk of sabotaging the pipeline by nefarious elements, may it be individuals or groups, especially in the explosive Balochistan. This risk can be overcome or at least reduced by patrolling and remote monitoring. Some power plants using the natural gas should supply electricity to both Iran and Pakistan. The location of these power plants must be demarcated in such a precise way to ensure its provision. The ways must be devised to ensure the constant supply without any disruption.

The spade work for Turkmenistan Afghanistan-Pakistan gas pipeline must be continued by Pakistan. This will provide our country a direct access to Central Asian Republics trade provided the peace in Afghanistan prevails. We also need to be vigilant regarding India .It can create bad blood between Iran and Pakistan to hinder this project Now the need of the hour is the successful implementation without any interruption. Even if the Government changes the projects in the national interest should continue with a consistent policy. But the fact remains that Pak-Iran gas project is in the great interest of our economy. This also bears witness to our transparent foreign policy.