Iran may be asked for assurance it will not use proceeds for N-proliferation. PHOTO: AFP/FILE
In a bid to soften the US stance on Iran-Pakistan (IP) gas pipeline project, Pakistan is considering seeking an undertaking from Iran that the project proceeds would not be used for nuclear proliferation.
Despite Iran’s nuclear deal with global powers, the US has made it clear that it had not changed its stance on the IP gas pipeline project.
Sources told The Express Tribune that Pakistani authorities, following the opinion of legal expert Ahmer Bilal Soofi, was considering seeking an undertaking from Tehran that it would not use proceeds from the IP gas pipeline project for nuclear proliferation.
According to Soofi, the global sanctions regime against Iran was based on a presumptive association between Iran’s energy revenues and its nuclear programme.
With the US government having already listed the National Iranian Oil Company (NIOC) as a proscribed entity, its involvement with the project might not only invite US sanctions, the action might also trigger similar EU sanctions as the Europeans tend to follow the Americans.
The attorney general of Pakistan has already suggested that a US-based international law firm should be engaged to evaluate the project before it gets rolling in 2015. According to a senior foreign office official, Americans had objected to the ‘intent’ of the pipeline, hence any finer distinction (natural gas, liquefied gas construction for the pipeline of the actual gas supply) would not cut much ice with them.
The foreign office official also said geo-strategic dynamics of the region, including the situation in Afghanistan, turmoil in the Middle East, the wider problem of global terrorism and the pervasive anti-Americanism in the country would be important considerations in the US calculations of the IP gas pipeline project.
Due to the threat of US sanctions, Pakistan faced problems in securing funds for the project and the government had requested Iran to finance the portion of the project at Pakistan’s side too.
During the previous government, Iran had committed to provide $500 million to finance Pakistan’s portion of pipeline but the present government wants Iran to enhance the credit limit.
The total cost of the project has been estimated at $1.8 billion. Against this financing, the government had decided to award the contract of Engineering Procurement and Construction (EPC) to the Iran-designated firm, Tadbir Energy.
According to a petroleum ministry report, if the furnace oil-based power generation is replaced with imported gas, it would have an annual savings of $2.4 billion. It also said that incremental impact of IP gas price will be just 20% in the country’s overall average gas basket price if 750 million cubic feet per day (mmcfd) gas is imported.
Under the project, Pakistan will import 750 mmcfd extendable to one billion cubic feet gas per day.
Published in The Express Tribune, December 3rd, 2013.
COMMENTS (16)
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The whole thing about sanctions is stuff and nonsense. The problem for Pakistan is that they do not have to please the US. Pakistan have to ponder whether the US will make its own decisions or will the US continue to wait for its instructions from a small country in the Eastern Mediterranean.
Mr Khan should protest against this US Pipeline 'drone' ++++++++++++++++++++++++++++++++++++++++++ What business has US to stop Pakistan from busying gas at 4 times the price of the current Sui gas?
Pakistan democracy has a very long way to regain the dignity it lost because of the prolonged military rule, to regain the freedom for its people, so that they can think freely and to act independently without the fear or influence of others, solely in the interest of the Nation....
Rex Minor
ETBLOGS1987
@Parvez: Agree in principle. But pipelines need money not just self respect to build. Pakistan does not have the necessary funds.
@Aschraful Makhlooq:
Sounds great - classic anti American chest thumping Pakistani rant. Now explain why USA is your largest export customer - why USA is largest donor - why USA supports your international loans with IMF, ADB etc - why USA is primary supplier of your high tech aircraft? Anti American blather is popular in Pakistan - long on emotion short on logic.
The truth is that every government in Pakistan, be it Musharraf's or PPP's or PML-N's, none of them ever had an interest in this pipeline and this is just an attempt to get out of the signed contract and also to avoid paying contractual damages to Iran. Even the general public in Pakistan was not interested in the pipeline during Musharraf's tenure when it was IPI pipeline. There were no sanctions at that time and the price of gas was less than half the price in the present contract. At that time they were not aware of the oncoming gas shortages and thought that only India will benefit by the IPI pipeline.
@PyaraPakistan:
That makes sense - but you fail to explain how your going to build the IP when there are UN and USA sanctions against it (nobody is going to finance it) - and you fail to discuss the ramifications of violating those sanctions. . I would argue that Pakistan's energy crisis is really a financial crisis. The World is drowning in energy which is why China, India etc could afford to cutback on Iranian oil purchases. Pakistan is located short distance from the Worlds largest energy hub yet Pakistan can't seem to negotiate purchase agreements - why is that? How many years have you been talking about LNG - yet you don't have a purchase agreement and have yet to start building a terminal? . IP champions tend to skip over the ramifications of sanctions. The USA/West dominates your high margin textile export market - source of most of your hard currency and engine which drives your economy. What happens when that goes away? What happens when you lose USA support for your IMF, ADB and other international loans?. What happens if UN or USA actually embargo's Pakistan? , Doing what's in Pakistan's best interest makes perfect sense - but I suggest you look at the big picture before making a decision.
@Asif: @Aschraful Makhlooq: @PyaraPakistan: Calm down ghairat brigadesmen. This is no attempt by West to keep us down(lol though). Sanctions are there for all 200 countries to abide by not just us. Even China and India, who have greater interest in Iranian Oil than our comparatively small stake of in a gas pipeline, have agree to abide by it. Please think at times before jumping in to criticize any and everyone your minds could think of.
LIke beating a dead horse - asking the American's to provide you with an exception is a waste of effort.
Now Pakistan is going to need NOC from US to import gas from Iran to overcome energy crises.When Pakistani leadership shall admit and confess this harsh and bitter reality that US never wants to see Pakistan a self-reliant,sovereign and economically prosperous country and US is Pakistan's friend for its own hidden interests and purposes and would never allow Pakistan to import any thing from Iran not only gas and how long Pakistan shall depend upon US' aid and how much time more Pakistani leadership is going to take to understand hidden US' purposes and interests?????
Gas pipeline will be a mirage. Pakistan is very much concerned about America's concerns so it has no concern about the people of Pskistan.
Come on ... This is our country. We know our needs and Gas is one of them. We should do whatever is in the favour of our country. We should not let the west or any country influence our decisions who keep their vested interests in mind. And by the way the west do not want us to progress, they want us to suffer, struggle and beg all the times. Get this project going without listening to these bullocks .... Bravo !!!!!!!!!!!!
Pakistan must be on the mend if it is concerned about nuclear proliferation.