Iran–Pakistan Gas Pipeline
Pak-Iran gas pipeline
Pak-Iran gas pipeline project - which would essentially change the face of the ongoing energy crisis in Pakistan for the foreseeable future – seems to be ending in despair. Initially, the project too included India. However, India dropped out along the way since the negotiations commenced nearly two decades ago. Now, there are again reports doing round in media, reporting Indian Minister of External Affairs Salman Khurshid, that India might renter negotiations over the IP gas pipeline project.
In March 2010, Pakistan and Iran signed an agreement over the construction of the gas pipeline project. The ambitious $7.6 billion project required the parties to construct a 2,100 kilometres of pipeline for the supply of natural gas to Pakistan.
So far, Iran has constructed 900 km of its part of the pipeline, while Pakistan has yet to start a work at its end. As per the agreement, Iran would supply Pakistan with 750 million cubic feet of natural gas per day for 25 years from the end of 2014.
However, since its inception, the agreement has been mired in political controversy, perpetually delaying the implementation of the project from our end. Pakistan’s dependence on US compels one to question that ‘Why did we commit to such an undertaking in the first place?’
It certainly wasn’t a surprise that US-Iran relations were anything but warm. Iran’s Ahmadinejad was vocal as ever and there was no sign of a thaw.
We had elections then, political instability and lack of finances to pay for the deal and above all the government had the knowledge about the cost of delay – a penalty of one million dollars per day.As Pakistan is now obliged to construct the remainder of the pipelines, it has to understand certain legal implications, which it may face.
Firstly, US sanctions designed to limit the development of Iran’s petroleum sector would apply to the pipeline’s construction. These would, in effect, blacklist any company involved in the building.
Pak-Iran gas pipeline project - which would essentially change the face of the ongoing energy crisis in Pakistan for the foreseeable future – seems to be ending in despair. Initially, the project too included India. However, India dropped out along the way since the negotiations commenced nearly two decades ago. Now, there are again reports doing round in media, reporting Indian Minister of External Affairs Salman Khurshid, that India might renter negotiations over the IP gas pipeline project.
In March 2010, Pakistan and Iran signed an agreement over the construction of the gas pipeline project. The ambitious $7.6 billion project required the parties to construct a 2,100 kilometres of pipeline for the supply of natural gas to Pakistan.
So far, Iran has constructed 900 km of its part of the pipeline, while Pakistan has yet to start a work at its end. As per the agreement, Iran would supply Pakistan with 750 million cubic feet of natural gas per day for 25 years from the end of 2014.
However, since its inception, the agreement has been mired in political controversy, perpetually delaying the implementation of the project from our end. Pakistan’s dependence on US compels one to question that ‘Why did we commit to such an undertaking in the first place?’
It certainly wasn’t a surprise that US-Iran relations were anything but warm. Iran’s Ahmadinejad was vocal as ever and there was no sign of a thaw.
We had elections then, political instability and lack of finances to pay for the deal and above all the government had the knowledge about the cost of delay – a penalty of one million dollars per day.As Pakistan is now obliged to construct the remainder of the pipelines, it has to understand certain legal implications, which it may face.
Firstly, US sanctions designed to limit the development of Iran’s petroleum sector would apply to the pipeline’s construction. These would, in effect, blacklist any company involved in the building.