Pakistan dithers on Iran gas pipeline plan
Wednesday, October 26, 2011
ISLAMABAD: Federal Minister for Petroleum Dr Asim Hussain has said a breakthrough in the project for laying a pipeline to import natural gas from Iran depends on an “understanding” with the international community.
During an interview with the VOA on Tuesday he said Pakistan was working on the project but progress depended on world conditions. “Progress on the Iran-Pakistan (IP) gas pipeline project depends on international understanding,” he said.
Twenty million cubic meters gas will be imported per day from Iran under the IP gas pipeline project that will cost $7.5 billion. The 2775 km long pipeline is expected to be completed by 2016.
The current statement of the minister apparently makes the project of importing natural gas from Iran doubtful. On the contrary, Iranian officials recently gave optimistic statements about completing the project at the earliest. The Iranian foreign minister had told Prime Minister Yusuf Raza Gilani in September that the Iranian part of the Iran-Pakistan gas pipeline would be completed by the middle of next year while PM Gilani had also emphasised the early completion of the gas pipeline project and the import of 1,000 MW electricity from Iran.
During his visit to Pakistan in September, Iranian Foreign Minister Ali Akbar Saleh said Iran was ready to lay the pipeline in Pakistani territory and that Iran could even start exporting electricity immediately if it could be connected with the grid system of Pakistan.
Dr Hussain has also said Iran has offered to supply 10,000 MW electricity to Pakistan to overcome the current power shortage. He said a plan to lay the transmission line in this connection is under consideration. At present Pakistan is importing 35 MW electricity from Iran for Gwadar and plans are also under way to increase it to 100 MW.
Since the decade of the ’90s Pakistan has been trying to implement the proposed plan of laying the pipeline to import natural gas from Iran. But the international community, particularly the US, does not support the plan and hence Pakistan has always taken a cautious approach towards the issue.
In August this year, Pakistan sought a six-month waiver from Iran in executing its part of the $3 billion IP gas pipeline project. Both sides had agreed on the GSPA commencement date of December 31, 2014 to make the project operational, and there was a clause of take and pay in the agreement under which any of the two countries that caused a delay in completing the project would be liable to $200 million penalty per month after December 31, 2014. Both countries are to complete the project under a segmented approach.
According to a top official at the ministry of petroleum and natural resources, Pakistan has formally asked Tehran to extend a waiver for at least six months since Pakistan fears that the project might get delayed because of unforeseen hurdles.
During her tour of Pakistan last week, US Secretary of State Hillary Clinton, without mincing any words, expressed American reservations about the Pakistan-Iran gas pipeline project. She said, “Iran is a very difficult, rather dangerous neighbour of all countries whose borders meet with it. Apparently no prediction can be made about the internal political and economic situation in Iran.”
Pakistan dithers on Iran gas pipeline plan