Geopolitical tensions mar multi-billion dollar Pakistan-Iran gas pipeline project

Pakistan is in "constant" touch with the US administration seeking a tacit green light to the long-stalled Pakistan-Iran gas pipeline project but "there are remote chances of a favorable response" from Washington, a Foreign Ministry official told Anadolu.

"In given geopolitical situation, there are remote chances of the US getting back to us with a favorable response," said the official on condition of anonymity, referring to the persistence of tensions between Washington and Tehran over the latter's alleged nuclear endeavors.

Kicked off in 2013 and with several deadlines already missed, the Pakistan-Iran gas pipeline project is unlikely to meet another deadline of 2024 due to long-standing US sanctions against Tehran.

Pakistan earlier this year requested Washington for a solution to the lingering imbroglio but has not yet received any response.

“We have told Washington that the gas pipeline project is very crucial in terms of meeting our growing energy needs,” the official said, adding that Islamabad is finding alternative ways to cope with its energy requirements.

Pakistan, in recent months, inked agreements with Russia and Azerbaijan for procurement of crude oil and gas.

The country received its maiden liquified petroleum gas (LPG) cargo from Russia on Tuesday.

Moreover, the official said, Pakistan is not in a position to initiate a new controversy considering its dragging economy and reliance on international loaning agencies.

Islamabad secured a last-minute bailout from the International Monetary Fund in July to avoid a lurking default.

Negotiating with Iran to avoid penalty

Pakistan is negotiating with Iran to settle a financial row over the multi-billion-dollar gas pipeline project, which stands stalled apparently under US pressure, an official said on Wednesday.

Pakistan's Additional Secretary for Petroleum Hassan Yousafzai on Wednesday told a Senate committee that Islamabad is trying to negotiate with Tehran to avoid a whopping $20 billion in liabilities as the deadline for the long-stalled project is approaching.

“The issue has also been raised with the US," Yousafzai said, referring to Islamabad's repeated attempts to woo its longtime ally Washington to tacitly greenlight the project, which is crucial to meet its domestic energy needs.

The development came weeks after Islamabad issued a notice of “Force Majeure and Excusing Event” to Tehran to suspend its contractual obligation on completion of the 1,150-kilometer (714-mile) gas pipeline.

This means, Pakistan expressed its inability to pursue the project until US sanctions on Iran remain in place or Washington tacitly allows Islamabad to go ahead with the project.

Earlier this year, former Petroleum Minister Musadik Malik had said that despite being committed to its contractual obligations, Pakistan had been unable to start construction of the pipeline, which aims to supply 750 million cubic feet per day of gas, due to US sanctions on Iran.

Tehran claims to have completed its side of the pipeline. The groundbreaking ceremony of the project was jointly conducted by Pakistan's then-President Asif Ali Zardari and then-Iranian President Mahmoud Ahmadinejad near Iran's port city of Chahbahar in March 2013 with an estimated cost of $7.5 billion at the time.

Senators demand explanation on US pressure

The briefing prompted the Senate committee to summon the top Foreign Ministry officials and the attorney general to explain Washington's objections to the project, which originally was slated to be completed in 2015.

Senator Sadia Abbasi, who heads the Senate Committee on Cabinet Secretariat, questioned why Pakistan is facing rare treatment over its energy agreement with Iran.

"Why India never faced such restrictions,” she said, citing regular procurement of oil by India from Iran.

Senator Mushtaq Ahmed from the country's mainstream religiopolitical party Jamaat-e-Islami called for summoning the Foreign Ministry officials to “find out why can’t we purchase cheap gas from the neighboring country.”

“We should know the reason behind the obstruction,” he said.