Dilly-dallying: IP pipeline – no concrete offer to Russia yet

Islamabad, Moscow unlikely to seal deal during Putin’s visit.

Zafar Bhutta September 17, 2012


Pakistan and Russia are unlikely to seal a deal on the construction of Iran-Pakistan (IP) gas pipeline during Russian President Vladimir Putin’s visit to Islamabad next month as the former is shy of making a ‘concrete offer’ of cooperation because of intense pressure from the United States.

Sources in the Ministry of Petroleum and Natural Resources told The Express Tribune Russian authorities were expecting some concrete offer from Pakistan for financing the construction of the pipeline during a meeting of the Inter-governmental Commission (IGC) held recently in Islamabad.

“During the dialogue, Russia wanted to know its position in the IP project with some clear offer from Pakistan – whether it will only finance the project or also construct the pipeline and provide machinery,” an official said, adding Pakistan did not give a clear response to these questions.

Now Russian authorities were perplexed and wondered how the two sides could make a breakthrough in such a confusing situation, he said.

The IGC meeting was a preparatory exercise prior to the visit of the Russian president in October to prepare the ground for striking deals on different projects like IP gas pipeline, Diamer Bhasha Dam and 1,000-megawatt CASA power import project. Russia has placed the IP pipeline on top of its priorities despite US pressure, which fiercely opposes trade and economic ties with Tehran over its alleged nuclear programme.

Under the IP project, costing a total of $1.5 billion, Pakistan will import 750 million cubic feet of gas per day (mmcfd) from Iran, which could be increased to one billion cubic feet per day (bcfd).

“We see Putin’s visit as a goodwill gesture only to bolster relations and no milestone will be reached due to the US pressure,” a petroleum ministry official remarked.

He said Moscow had expressed its desire to become a partner of Pakistan in overcoming the energy crisis and its energy giant Gazprom was ready to take part in the IP pipeline project.

Pakistan is desperately seeking funds for the pipeline and is in a critical situation since its long-trusted friend China has also backed out due to the US opposition.

“The Pakistan government should make a concrete offer and welcome the Russians at a time when no other country is coming forward to finance the project,” the official suggested.

Russia has also expressed interest in building another pipeline, which will run from Turkmenistan, pass through Afghanistan and Pakistan and end in India, which is referred to as the TAPI project. For this project, Pakistan and India have signed a gas purchase agreement with Turkmenistan.

This pipeline enjoys the backing of the US and Asian Development Bank (ADB), which is acting as transaction adviser to generate funds for the $7.5 billion project.

Recently, Pakistan organised a road show in Singapore to woo investors, and according to an official of the petroleum ministry, around six renowned companies have expressed interest in participating in the TAPI project.

Published in The Express Tribune, September 18th, 2012.


G. Din | 9 years ago | Reply

"Pakistan ... is in a critical situation since its long-trusted friend China has also backed out due to the US opposition." Long-trusted? It seems it is a one-way street. It was always so but you kept hoping against hope. If it took you 65 years to come to this conclusion, you must be pretty naive! Frankly, it may be a good time to break off since China will probably be embroiled in a world war soon!

MALIK | 9 years ago | Reply

If Russia will construct pipeline and provide machinery then how Politicians, bureaucrats......etc will got commission %%% ... $$$ ???


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