pakpride00090
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These are the pipelines that would have drastically reduced oil prices in Pakistan and also gave it a revenue via transits fee. They were dream projects for many. I had first written this as a comment to one users question, but thought of polishing it and making it a post.
Pakistan's oil pipelines
IRAN-PAKISTAN-INDIA Pipeline (IPI)
The oil pipeline proposed would have been a gamechanger.
In 1999, India was also on board and willing to pay half the cost of the project. So, the pipe will go from Iran to Pakistan to India. And, India will pay regular monthly payments to Pakistan for using the pipeline too at $600million per month of that times money as transit fee.
It would have given a huge leverage for Pakistan over India just like how Russia currently has over Europe. Apart from that the benefit was much cheaper oil prices for both countries. More friendly ties, and less chances of war as that would threaten the deal which would harm both.
In February 2007, India and Pakistan agreed to pay Iran US$4.93 per million British thermal units and everything looked great. Iran was going to get a regular consistent buyers. They even wanted to include Bangladesh in the plan!
Then in 2009 India withdrew from the project after the 26/11 Mumbai terrorist attacks and also possibly pressure from US as India had signed some Nuclear deal with US in 2008.
Then China came into play and there was plan to make the pipeline to China. But again it did not happen.
Then in early 2010, Iran and Pakistan signed the deal without any other countries.
By end of 2011, Iran completed its section of the pipeline. And Pakistan had not even started the work! Iran got irritated and offered a $500Million to Pakistan to complete the work fast.
Then Osama Bin laden incident happened, and all global attention turned on Pakistan, thus it became difficult to deal with Iran.
Then when things didnt move forward, Iran said that under the terms of condition, if Pakistan doesnt complete its work by 2014, it will have to pay a penalty of $1million per day to Iran for causing them so much loss.
And guess what, We did not complete it at all. Did not start at all.
Iran asked for the penalty which Pakistan refused to give. And kept stalling Iran till 2019 when they went to international court. Pakistan kept saying it was due to US sanction it cannot do anything.
When it became a legal case, Pakistan then hired a French law firm, Gide Loyrette Nouel, to study the deal and prepare a legal response to Iran’s position that the US sanctions do not impact its gas import trade. In late 2019, Pakistan informed Iran in writing that it cannot execute the project as long as Tehran is under a US sanctions regime.
There were fear of FATF black listing too as Iran was sanctioned country.
But Pakistan is caught in a catch-22 situation over the deal. Under a penalty clause, Pakistan is bound to pay $1 million per day to Iran from January 1, 2015 for failing to build its part of the pipeline. If Iran takes the case to an arbitration court, Pakistan will likely have to pay around $1.8 billion in penalty.
Ultimately, Iran made a huge loss by dealing with Pakistan.
The biggest beneficiary of this project would have been Pakistan as all the pipes go through us, thus giving us max control and benefit in every way. And also, we would have power over both Iran and India. As if Iran did something bad to us, we could say we will stop the pipe. And in case of India, we could double their petrol prices if we stop. It was Literal free money and power.
Turkmenistan–Afghanistan–Pakistan–India Pipeline
It is a natural gas pipeline being developed with participation of the Asian Development Bank. The pipeline will transport natural gas from the Galkynysh Gas Field in Turkmenistan through Afghanistan into Pakistan and then to India.
This project started in 1995 with roots in 1991. The main reason for this pipelines was because after Soviet Union collapse, many oil companies started in Kazakistan and Tukmenistan, but Russia refused to use its oil pipelines for export of oil. Since Russia controlled all the pipelines they wanted some new pipeline projects and thought of selling to India and Pakistan.
The project got delayed due to many global issues including 9/11 attacks, Taliban and all, it got delayed.
On 24 April 2008, Pakistan, India and Afghanistan signed a framework agreement to buy natural gas from Turkmenistan
The intergovernmental agreement on the pipeline was signed on 11 December 2010 in Ashgabat. However, in April 2012, India and Afghanistan have failed to agree on transit fee for gas passing through Afghan territory. Consequently, Islamabad and New Delhi too could not agree on the transit fee for the segment of the pipeline passing through Pakistan, which has linked its fee structure to any India-Afghanistan agreement
On 16 May 2012, the Afghan Parliament approved the agreement on a gas pipeline and the day after, the Indian Cabinet allowed state-run gas-firm GAIL to sign the Gas Sale and Purchase Agreement (GSPA) with Türkmengaz, Turkmenistan's national oil company.
Construction on the project started in Turkmenistan on 13 December 2015, work on the Afghan section began in February 2018, and work on the Pakistani section was planned to commence in December 2018.
Although the work in Afghanistan started in February 2018, it was again suspended due to the fighting between the Afghan government and the Taliban.
After the Taliban established control over the country on 15 August 2021, it promised in October to resume the project soon. Though nothing has progressed since.
Originally, the cost of the pipeline project was reportedly estimated at US$7.6 billion, but a more recent estimate was $10 billion
India-Pakistan-Pipeline
Another thing most people don't know. In 2012, India had made an offer to build a pipeline to Pakistan border from Indian refineries and sell Pakistan refined oil at costs 30% cheaper than the import price from Gulf. They said they have excess capacity enough to cover Pakistan's entire needs. And in exchange they will buy naphtha from pakistan which we have an excess of and which Indian industries had a shortage of.
Pakistan's oil pipelines
IRAN-PAKISTAN-INDIA Pipeline (IPI)
The oil pipeline proposed would have been a gamechanger.
In 1999, India was also on board and willing to pay half the cost of the project. So, the pipe will go from Iran to Pakistan to India. And, India will pay regular monthly payments to Pakistan for using the pipeline too at $600million per month of that times money as transit fee.
It would have given a huge leverage for Pakistan over India just like how Russia currently has over Europe. Apart from that the benefit was much cheaper oil prices for both countries. More friendly ties, and less chances of war as that would threaten the deal which would harm both.
In February 2007, India and Pakistan agreed to pay Iran US$4.93 per million British thermal units and everything looked great. Iran was going to get a regular consistent buyers. They even wanted to include Bangladesh in the plan!
Then in 2009 India withdrew from the project after the 26/11 Mumbai terrorist attacks and also possibly pressure from US as India had signed some Nuclear deal with US in 2008.
Then China came into play and there was plan to make the pipeline to China. But again it did not happen.
Then in early 2010, Iran and Pakistan signed the deal without any other countries.
By end of 2011, Iran completed its section of the pipeline. And Pakistan had not even started the work! Iran got irritated and offered a $500Million to Pakistan to complete the work fast.
Then Osama Bin laden incident happened, and all global attention turned on Pakistan, thus it became difficult to deal with Iran.
Then when things didnt move forward, Iran said that under the terms of condition, if Pakistan doesnt complete its work by 2014, it will have to pay a penalty of $1million per day to Iran for causing them so much loss.
And guess what, We did not complete it at all. Did not start at all.
Iran asked for the penalty which Pakistan refused to give. And kept stalling Iran till 2019 when they went to international court. Pakistan kept saying it was due to US sanction it cannot do anything.
When it became a legal case, Pakistan then hired a French law firm, Gide Loyrette Nouel, to study the deal and prepare a legal response to Iran’s position that the US sanctions do not impact its gas import trade. In late 2019, Pakistan informed Iran in writing that it cannot execute the project as long as Tehran is under a US sanctions regime.
There were fear of FATF black listing too as Iran was sanctioned country.
But Pakistan is caught in a catch-22 situation over the deal. Under a penalty clause, Pakistan is bound to pay $1 million per day to Iran from January 1, 2015 for failing to build its part of the pipeline. If Iran takes the case to an arbitration court, Pakistan will likely have to pay around $1.8 billion in penalty.
Ultimately, Iran made a huge loss by dealing with Pakistan.
The biggest beneficiary of this project would have been Pakistan as all the pipes go through us, thus giving us max control and benefit in every way. And also, we would have power over both Iran and India. As if Iran did something bad to us, we could say we will stop the pipe. And in case of India, we could double their petrol prices if we stop. It was Literal free money and power.
Turkmenistan–Afghanistan–Pakistan–India Pipeline
It is a natural gas pipeline being developed with participation of the Asian Development Bank. The pipeline will transport natural gas from the Galkynysh Gas Field in Turkmenistan through Afghanistan into Pakistan and then to India.
This project started in 1995 with roots in 1991. The main reason for this pipelines was because after Soviet Union collapse, many oil companies started in Kazakistan and Tukmenistan, but Russia refused to use its oil pipelines for export of oil. Since Russia controlled all the pipelines they wanted some new pipeline projects and thought of selling to India and Pakistan.
The project got delayed due to many global issues including 9/11 attacks, Taliban and all, it got delayed.
On 24 April 2008, Pakistan, India and Afghanistan signed a framework agreement to buy natural gas from Turkmenistan
The intergovernmental agreement on the pipeline was signed on 11 December 2010 in Ashgabat. However, in April 2012, India and Afghanistan have failed to agree on transit fee for gas passing through Afghan territory. Consequently, Islamabad and New Delhi too could not agree on the transit fee for the segment of the pipeline passing through Pakistan, which has linked its fee structure to any India-Afghanistan agreement
On 16 May 2012, the Afghan Parliament approved the agreement on a gas pipeline and the day after, the Indian Cabinet allowed state-run gas-firm GAIL to sign the Gas Sale and Purchase Agreement (GSPA) with Türkmengaz, Turkmenistan's national oil company.
Construction on the project started in Turkmenistan on 13 December 2015, work on the Afghan section began in February 2018, and work on the Pakistani section was planned to commence in December 2018.
Although the work in Afghanistan started in February 2018, it was again suspended due to the fighting between the Afghan government and the Taliban.
After the Taliban established control over the country on 15 August 2021, it promised in October to resume the project soon. Though nothing has progressed since.
Originally, the cost of the pipeline project was reportedly estimated at US$7.6 billion, but a more recent estimate was $10 billion
India-Pakistan-Pipeline
Another thing most people don't know. In 2012, India had made an offer to build a pipeline to Pakistan border from Indian refineries and sell Pakistan refined oil at costs 30% cheaper than the import price from Gulf. They said they have excess capacity enough to cover Pakistan's entire needs. And in exchange they will buy naphtha from pakistan which we have an excess of and which Indian industries had a shortage of.
