Clashing interests: US threatens sanctions over Iran gas deal

Washington sees no immediate solution to energy crisis; urges Islamabad to continue reforms.

Shahbaz Rana September 16, 2011


The United States has renewed its opposition to the multi-billion-dollar Iran-Pakistan gas pipeline, warning that Islamabad’s continuous pursuit of the plan may invoke US sanctions.

The issue was raised during the fourth round of Pak-US strategic dialogue on energy that concluded in Islamabad on Thursday without any major tangible gains.

Officials familiar with the development told The Express Tribune that the US Special Envoy for International Energy Affairs, Ambassador Carlos Pascual, ‘advised’ Islamabad to abandon its plan to import gas from Iran. He proposed instead that Pakistan pursue the TAPI project, a gas pipeline through Turkmenistan, Afghanistan, Pakistan and India.

Pakistan has reservations about the TAPI project due to security concerns about Afghanistan and unsettled issues relating to gas prices.

The South Pars gas field in Iran is the largest in the world, meaning that its production costs for Iran are significantly cheaper than those for gas extracted from smaller fields in Central Asia, including the Caspian Sea fields to which Turkmenistan has access.

(Read: Central Asia, making up for lost time)

A US embassy spokesperson confirmed that Washington is concerned with Pakistan’s current direction, and the issue was raised in Ambassador Pascual’s meetings. “The proposed Pakistan-Iran pipeline, if built, could raise concerns under the Iran Sanctions Act. We are encouraging Pakistan to seek alternatives”, read a terse response from the US embassy.

The renewed opposition from the US came just days after high level talks between Pakistan and Iran, where the two neighbours vowed to go ahead with the project that would bring its first gas flow by 2014.

Water and Power Minister Naveed Qamar, who co-chaired the meeting, denied to The Express Tribune that such a discussion took place.

However, another senior government official said that despite opposition from the US, Pakistan would not abandon the project, as an agreement has already been signed with Tehran.

The two-day strategic talks ended without any significant developments, despite initial high hopes. The US seems reluctant to provide significant investment in Pakistan’s financially crippled power sector.

A senior government official told The Express Tribune that the US special envoy has informed Pakistani authorities that it would be naïve to expect large support from Washington in the power sector until there is an institutional overhaul in the way the energy sector is regulated and managed.

He said that the US has urged Pakistan to introduce major reforms by scrapping redundant policies and implementing new regulations. The latest US stance highlights the urgency to reform the sector that has stalled economic growth. Despite special cabinet committees, the government has failed to carry out reforms over the past three years.

According to a US embassy handout, Ambassador Pascual reaffirmed the United States’ long-term commitment to working with Pakistan to establish a commercially viable and sustainable power sector. It further stated that, during the talks, Pakistan underscored its will to strengthen energy sector governance and efficiency, pursue regulatory reforms, improve financial management, and create a business climate that helps drive investment.

The US, welcoming these plans which were elaborated in the Integrated Energy Sector Report, maintained that these measures will help develop a stronger foundation for investment. Both sides agreed to continue technical exchanges in areas that can help improve power availability.

“As all Pakistanis know, reliable and affordable energy is critical to Pakistan’s prosperity,” said Ambassador Pascual. “Without it, businesses can’t operate and families can’t light and cool their homes. Pakistan’s future depends on power.”

The US also welcomed Pakistan’s continued engagement with international financial institutions and the private sector to assess the feasibility of viable hydropower projects, a reference to the $12 billion Diamer Bhasha dam, for which the Asian Development Bank has agreed to provide funding.

Published in The Express Tribune, September 16th, 2011.


dfgdfgfg | 10 years ago | Reply

Beware the NONSTOP SPECULATIVE Propaganda Campaign of lies and nonsense for War against Islamic Republic of Iran

This is all nonstop propaganda lies of nonsense like in IRAQ with WMD by zionist US aggressor from Iraq, Afghanistan to Libya. Iran has no nuclear weapons program and has been consistent all times. For about 12 years, Israel has claimed that Iran will have a nuclear bomb within 6 months or a year. The USA constantly issues accusations about Iran's "nuclear weapons" but to this day, has not produced one shred of evidence to support those accusations. So, why should one believe anything they say now? any potential delay in it is just imaginary. Iran wants to enjoy the benefits of NPT for peacefull nuclear energy that's why Iran is to remain in NPT Otherwise, Iran has quit from NPT a long time ago.

In principle, however, nothing in international law or in the Nuclear Non-Proliferation Treaty forbids the enrichment of uranium. Besides Iran, several other countries, parties or not to the treaty, enrich uranium without being accused of "threatening the peace." And in Iran, this activity is submitted to inspections by the International Atomic Energy Agency. These inspections, it is true, are constrained by a safeguards agreement dating from the 1970s. But it is also true that the IAEA has never uncovered in Iran any attempted diversion of nuclear material to military use.

While the US possesses and has used nuclear weapons in the past, Washington, in a politically-motivated move, is imposing unilateral sanctions against Iran, which does not possess nuclear weapons nor does it seek to develop such weapons. WikiLeaks – A fabricated conspiracy of nonstop propaganda lies to isolate Iran from other Muslim nations for US's benefits on behalf of unbreakable bond Israel.

Whatsup | 10 years ago | Reply

Pakistan is in dire need of energy for keeping its economic engine alive and for keeping its humanity alive. This need should be fullfilled without any further delays or questions. This is Pakistan's leadership's responsibility to take care of its humanity that is suffering and dying everyday!!! Pakistan take care of your Humanity now immediately . . . no time for dancing around!! Take care of the energy crisis now!!

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