Sunday, January 28, 2007
Importance of Iran-Pakistan-India pipeline
If the news is true that Iran, Pakistan and India have agreed on a formula for setting a rate for Iranian gas, today could be a red-letter day for Pakistan. The top official of the National Iranian Oil Company says the agreement was reached in Tehran and now the three countries have a month in which to confirm it at the governmental level, after which the pipeline is a done deal, promising to transform Pakistan and change the strategic significance of the region by guaranteeing peace instead of war!
The project was stalled for so long since 1994 that its cost must have reached $7 billion by now, but it is still worth having for a number of reasons. It will run for 1,500 miles across Iran and Pakistan, and will supply gas to India too. Pakistan will look after the pipeline for India and will get some rental, with which it will be able to improve the lives of the Baloch through whose territory it will pass. It will also be a project to transform Pakistan and reinvent its foreign image as well as its self-image. We have few energy options on the table and need the pipeline more than India.
The pipeline was obstructed by the usual drag of India-Pakistan relations, which nose-dived after 2001 as India returned with its consulates to Afghanistan and Pakistan began to blame it for fuelling the rebellion in Balochistan. In 2004 peace diplomacy restarted the talks on the project, but soon India began to drag its feet on the pipeline after becoming Americaââ¬â¢s strategic ally with attractive contracts for nuclear power production. Also, it could fall back on its fleet of ships for transporting Liquefied Petroleum Gas and there were lobbies in India that cast doubt on Pakistanââ¬â¢s ability to achieve internal peace long enough to actually ensure India a regular supply of gas.
Pakistan has been talking about pipelines since 1990. It first thought it would get gas from Turkmenistan and become a transit country for it because the real customer would be India. But it couldnââ¬â¢t change itself radically from a warrior nation to a trading one that looked forward to developing normally as an economy with an ensured supply of energy. Because of its other activities, it was barred from acquiring nuclear power plants to produce the electricity it needed; and there was internal rejection of the idea of big dams for hydel energy.
It is, of course, still possible that Pakistan may be dreaming an unrealistic dream, but if it signs an international contract it will be forced to quieten down and not think of jihad and jihadi militias and low-intensity wars.
The glitches came first from India and then from Iran. India is still involved in a kind of arm-wrestling over its agreement with the United States and may be using the Iranian pipeline as one of the counters in that. But once it signs ââ¬â which will become clear in a month ââ¬â it will have to participate in the regionââ¬â¢s first attempt to revolutionise itself. The other glitch came from Iran, which began having second thoughts from a mixture of approaches, one purely market-related and the other emanating from its habit of self-isolation as a means of attaining honour. India was not willing to pay more than $4.50 per million British Thermal Units (BTU) and Iran was quoting over $7, on the basis of forecasts that international gas prices would skyrocket.
In this three-way deal, Pakistanââ¬â¢s position was the weakest. It had no alternative options because of weaknesses abroad and at home. Some measure of how important it thought the pipeline was can be seen in the fact that Prime Minister Shaukat Aziz did not apply the conditionality of Kashmir to it, which he has so unwisely attached to opening up trade with India. When India seemed to drag its feet the prime minister announced that if India was not willing, Pakistan would go it alone. The Iranian impediment was probably removed by a weakening of the aggressive hold of Iranââ¬â¢s warlike President Mr Mahmoud Ahmadinejad on the project.
What Iran gains is far more than just a good reliable source of income. It makes a breakthrough in a region where everyone is keen to establish an economic foothold. It lessens its own isolation and wins regional friends that wonââ¬â¢t let it down during crises. It has got India to invest heavily in Iran despite American sanctions ââ¬â punishing with boycott any company investing more than $40 million in Iran ââ¬â and also got China to buy its oil futures. Breaking out of isolation also means a willingness to take fewer risks and establish a stake in regional peace. Iranââ¬â¢s isolation has pushed its oil production back to pre-Revolution level, 4 million barrels a day. Now it can potentially become a powerful economy in the region by reaching out to its neighbours. *
http://www.dailytimes.com.pk/default.asp?page=2007\01\28\story_28-1-2007_pg3_1
Importance of Iran-Pakistan-India pipeline
If the news is true that Iran, Pakistan and India have agreed on a formula for setting a rate for Iranian gas, today could be a red-letter day for Pakistan. The top official of the National Iranian Oil Company says the agreement was reached in Tehran and now the three countries have a month in which to confirm it at the governmental level, after which the pipeline is a done deal, promising to transform Pakistan and change the strategic significance of the region by guaranteeing peace instead of war!
The project was stalled for so long since 1994 that its cost must have reached $7 billion by now, but it is still worth having for a number of reasons. It will run for 1,500 miles across Iran and Pakistan, and will supply gas to India too. Pakistan will look after the pipeline for India and will get some rental, with which it will be able to improve the lives of the Baloch through whose territory it will pass. It will also be a project to transform Pakistan and reinvent its foreign image as well as its self-image. We have few energy options on the table and need the pipeline more than India.
The pipeline was obstructed by the usual drag of India-Pakistan relations, which nose-dived after 2001 as India returned with its consulates to Afghanistan and Pakistan began to blame it for fuelling the rebellion in Balochistan. In 2004 peace diplomacy restarted the talks on the project, but soon India began to drag its feet on the pipeline after becoming Americaââ¬â¢s strategic ally with attractive contracts for nuclear power production. Also, it could fall back on its fleet of ships for transporting Liquefied Petroleum Gas and there were lobbies in India that cast doubt on Pakistanââ¬â¢s ability to achieve internal peace long enough to actually ensure India a regular supply of gas.
Pakistan has been talking about pipelines since 1990. It first thought it would get gas from Turkmenistan and become a transit country for it because the real customer would be India. But it couldnââ¬â¢t change itself radically from a warrior nation to a trading one that looked forward to developing normally as an economy with an ensured supply of energy. Because of its other activities, it was barred from acquiring nuclear power plants to produce the electricity it needed; and there was internal rejection of the idea of big dams for hydel energy.
It is, of course, still possible that Pakistan may be dreaming an unrealistic dream, but if it signs an international contract it will be forced to quieten down and not think of jihad and jihadi militias and low-intensity wars.
The glitches came first from India and then from Iran. India is still involved in a kind of arm-wrestling over its agreement with the United States and may be using the Iranian pipeline as one of the counters in that. But once it signs ââ¬â which will become clear in a month ââ¬â it will have to participate in the regionââ¬â¢s first attempt to revolutionise itself. The other glitch came from Iran, which began having second thoughts from a mixture of approaches, one purely market-related and the other emanating from its habit of self-isolation as a means of attaining honour. India was not willing to pay more than $4.50 per million British Thermal Units (BTU) and Iran was quoting over $7, on the basis of forecasts that international gas prices would skyrocket.
In this three-way deal, Pakistanââ¬â¢s position was the weakest. It had no alternative options because of weaknesses abroad and at home. Some measure of how important it thought the pipeline was can be seen in the fact that Prime Minister Shaukat Aziz did not apply the conditionality of Kashmir to it, which he has so unwisely attached to opening up trade with India. When India seemed to drag its feet the prime minister announced that if India was not willing, Pakistan would go it alone. The Iranian impediment was probably removed by a weakening of the aggressive hold of Iranââ¬â¢s warlike President Mr Mahmoud Ahmadinejad on the project.
What Iran gains is far more than just a good reliable source of income. It makes a breakthrough in a region where everyone is keen to establish an economic foothold. It lessens its own isolation and wins regional friends that wonââ¬â¢t let it down during crises. It has got India to invest heavily in Iran despite American sanctions ââ¬â punishing with boycott any company investing more than $40 million in Iran ââ¬â and also got China to buy its oil futures. Breaking out of isolation also means a willingness to take fewer risks and establish a stake in regional peace. Iranââ¬â¢s isolation has pushed its oil production back to pre-Revolution level, 4 million barrels a day. Now it can potentially become a powerful economy in the region by reaching out to its neighbours. *
http://www.dailytimes.com.pk/default.asp?page=2007\01\28\story_28-1-2007_pg3_1
