‘Govt delaying IP project to please US’
The government has been purposely delaying import of gas from Iran to please the US which is damaging the country’s economy, says Pakistan Economy Watch (PEW) president Dr Murtaza Mughal on Tuesday.
Pleasing US at the cost of the country suggests that the government is dominated by incompetent and apathetic officials, it said.
The country’s largest bank National Bank of Pakistan and the country’s largest exploration company Oil and Gas Development Company Limited last week backed out from the Iran-Pakistan (IP) gas pipeline on fears of possible sanctions by the US.
Pakistan cannot secure its future without Iranian gas, said Mughal.
Controversial measures like banning CNG kits in new and old cars and cutting supply to CNG stations for months in a country with the world’s highest consumption make no sense, he added.
Dr Murtaza Mughal said that Iran has brought the pipeline to the border and now Islamabad should immediately start building the remaining portion of the pipeline.
Decades have already been wasted in discussions and modifications, further wastage of time will jack up costs and leave the industry uncompetitive in the international market, he warned.
Iran produces 5.5 trillion cubic feet of gas per year, it will sell 740 million cubic feet of gas per year which will address around 30% of our gas deficit, he said.
Mughal said that rulers seems unconcerned about over two per cent yearly fall in the GDP, over 25,000 crumbling industrial enterprises and untold miseries to the masses.
He observed that the performance of local exploration sector remained dismal despite knowing that our gas fields will be exhausted by 2025.
Interests of the foreign companies that continue to work in the restive regions prove that the business is still profitable for foreigner investors, he said.
American will continue to oppose gas pipeline and do nothing to resolve the chronic shortages except offering economically unviable alternatives, Dr Mughal noted.
Despite sanctions, Iran is India’s second major source of crude, it could be Pakistan’s major source of gas, he opined.
He asked India to take bold decision of joining the project after getting MFN status as it cannot ignore its nearest gas reserves for long.
Published in The Express Tribune, December 28th, 2011.
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Correction Iran will export around 700 million cubic feet of gas per day, not per year.
@Cautious:
Detials, detials. detials...........it is so much easier to blame the US and then go back to drinking tea
@Faisal Memon:
If it was that simple you have to wonder why action has not been taken.
@ cautious: you could say the same thing about any energy options under consideration such as LPG / electricity import/ coal. The circular debt problem, though focal to the whole issue, does'nt mean we should'nt secure our energy future.
The pipeline can be built by a SPE/ JV of various private companies which can raise money through IPO's, TFC's and syndicate financing. There is no need to rely on external financing. The end users of such gas should be financial worthy companies such as engro, ffbl and other fertilizer companies who will directly make payments to such SPE/JV for onward payment to Iran.
Thus, it will be a system parallel to the existing one and hence will be unaffected by circular debt. Such a model can make our energy resources attractive for investors who fear they will not get paid because of the circular debt problem!
@Mahmood: Press on.
This is a no brainier. Iranian gas is cheap, they are our neighbors, and we need the energy urgently. This is a project for Pakistanis, to hell with the Americans.
You don't have the money to build the pipeline. You don't have the money to defend the pipeline -- and the elephant in the room that no one wants to talk about --- you don't have the money to pay for the gas. So why is the IP considered a quick fix to Pakistan's problems?
Iran long ago offered to sell Pakistan 5000 MW of electricity through established grids that the US cannot interfere with as they already exist. So why did Pakistan not purchase ready-made power, which is needed, and which is one use for which the gas is intended?
Something strange went on then, and is also going on NOW with respect to the contracts with private electricity generators, shipboard generators, Middle East investors etc. All of these need real investigation before the US is used as a convenient punching bag. What if it is found that there is a whole internal mess to blame?
I am missing something here. If this pipeline is in the best interest of PAK, I do not understand why it is not going to be built. The government of PAK has made many decisions over the last month or so that it feels like are in their national interest such as fully funding its nuclear weapons program, shutting down the NATO supply line, limiting drone strikes, etc.
PAK could build this pipeline by itself.
The US has no say in what PAK does or does not do. This has been made very clear to everyone