ISLAMABAD: President Asif Ali Zardari has delayed a visit to Iran to discuss a huge gas deal despite Tehran's offer of a loan to help finance a project which the US opposes, officials said Tuesday.
The $7.5 billion pipeline project has run into repeated difficulties - over US opposition because of Iran's nuclear activities and Pakistan's difficulty in finding funds.
It was originally reported that Zardari would visit Iran last Friday and that the final agreement would be likely signed during the visit.
Pakistani officials denied that the visit had been cancelled, claiming it had never been officially scheduled due to Zardari's engagements in London and Paris.
"The visit may materialise on his way back from the ongoing foreign tour or he may visit Tehran after coming back home," a petroleum ministry official told AFP.
Iranian officials said that the visit had been postponed at Pakistan's request and would happen "soon".
"It has been agreed that the visit would take place with a bit of change. Iranian assistance to build the peace pipeline in Pakistan will be one of the issues on the visit's agenda," said Iran's foreign ministry spokesman Ramin Mahmanparast.
Negotiations are reaching a critical point, the Financial Times said, because it will take two years to build Pakistan's sections of the pipeline and Islamabad would have to start paying Tehran for the gas two years from now.
The newspaper said an increasingly desperate Pakistan is struggling to overcome strong opposition to the project from the United States, which has clamped economic sanctions on Iran because of its nuclear programme.
In 2010 Iran and Pakistan agreed that Iran would supply between 750 million cubic feet and one billion cubic feet per day of natural gas by mid-2015.
Islamabad has said that it will pursue the project regardless of US pressure, calling it vital to overcome the country's energy crisis that has led to debilitating blackouts and suffocated industry.
But in March, it was forced to review sources of funding after newspapers said a Chinese bank pulled out over fears that firms involved will face sanctions.
Pakistani officials said Tuesday that Iran had promised a $500 million loan and that Islamabad would meet the rest of its $1.6 billion share.
"There are impediments in view of the US opposition to the project but we are determined to complete it to meet our fast-growing energy requirements," said one government official on condition of anonymity.
But the Iranian foreign ministry spokesman said Iran has confirmed it can finance at least $250 million, despite Pakistan asking for $500 million.
"This is a technical issue," Mahmanparast said.
Analyst Imtiaz Gul said the deal would probably be signed only if the United States backs down over its opposition to the deal, possibly in exchange for Pakistani cooperation on Afghan peace efforts.
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No fear, every thing is in God's hands.move on to right direction leading to national prosperity.
@Dr, Qazi: Pakistan will pay thru barter trade. +++++++++++++++++++++++++++++++++++
Let's not be emotional on this issue.
Even if by some miracle this pipeline is built, how will Pakistan pay for the gas we get? As long as Iran is under sanctions, no Pakistani bank can transfer money to an Iranian bank. There is no "legal" way to clear any payment going to Iran. Any Pakistani bank involved in this transaction will be paying huge penalties to the international organizations just like Standards and Chartered and HSBC.
Can we afford that kind of punishment?
@Raj - USA: Your first line especially its second part "Pakistan has the knack for making enemies, even when it is absolutely unnecessary." has summarized Pakistan's history of actions very well.
We would be roundabout when straight forwardness is the right and the best approach. We consider friendship in international relations as personal will do things that were not even expected or asked or were simply bluffed.... later on cry foul when interests of the other party changed.
In the present case US is just stating its own interest, and Pakistan should make its decisions on what is right and best for them. Pakistan should realize that US cannot stop having relations with Pakistan.
In the next two decades the geopolitics of world influence will move from USA/Europe to Asia/China. Pakistan should make its relationship with China & Far East & more important its neighbours stronger. Pakistan is struggling and cannot meets its citizens energy requirements. To boost the economy businesses have to have the energy requirements for manufacture, citizens needs energy for security and currently Pakistan can only provide this 30% of the time. Iran is building a nuclear power station desp[ite condemnation from europe & USA. Iran knows oil will have its last day this century & is working for the benefit of its country and everyone in the world knows the condemnation is by israeli influenced countries. Zardari should do what is best for Pakistan and clearly this gas pipe line should be built.
"But the Iranian foreign ministry spokesman said Iran has confirmed it can finance at least $250 million, despite Pakistan asking for $500 million." +++++++++++++++++++++++++++++++++++++++++++++++++++ If Iran does not provide $500 Mn ask for $ 1000 Mn.
Surest way to terminate the endless foot dragging !
Pakistan must build up her relationship stronger, with Iran and China without any hesitation and fear......every month for the last 4 years I been reading about "final agreement" on the pipeline. The bottom line is Pakistanis need to learn what final means before quoting it every other month. Just like the final decision on the K dam Pakistanis will never make up their minds because it is not the land of the Pure it it the land where nothing ever gets done
we should go ahead with this, we cant always be american puppets
Pakistan has the knack for making enemies, even when it is absolutely unnecessary. When China and Russia have backed out of the IP pipeline, Pakistan thinks it can play the pipeline to get some advantage from US. In the process, Pakistan is making an enemy of Iran also. At one stage or other, Iran shall come out openly and say that Pakistan has been misleading it all along and never had any serious interest in the pipeline. Pakistan knows that even with Iran financing it partly, it cannot build the pipeline. Additionally, even if the pipeline is built, it will pass through the most troubled regions of Pakistan and cannot be protected from sabotage by various elements. The fact is that Pakistan does not have any interest in the pipeline in the present circumstances and is just continuing to mislead Iran. Iran also knows this, but shall keep pushing Pakistan for its own reasons. However, when Pakistan ultimately walks out of this project, it shall create bitter feelings on both sides. It would be better for Pakistan to be more open and frank with Iran. But again, GOP also wants to keep its citizens in hope as elections are around the corner.
It is in our long term interest to complete the planned gas pipeline project as soon as possible. In case of US pressure, Pakistan should demand access to drone technology and an India style nuclear agreement.
Let's see how Pakistan comes out the colexity of the situation. On the one side is national commitment with Iran on Gas Pipeline and Iran has spent huge mpney on completion of Gas pipeline on his side and is even ready to fund Pakistan side of Pipeline completion. On the other side is America's increasing pressure due to sactions on Iran. It's really test of the true wisdom of our president Mr.Asif Ali Zardari and our foreign ministry to cope with this complex situation. Historically, our energy needs have been messed up after U turn on Kalabagh Dam Construction and continuous delays in completion of IRan-Pak Gas pipeline and Diamer Bhasha Dam. America is trying to convince Pakistan to backout from the Iran Pak Gas Pipeline Project by offering some initial funds for Diamer Bhasha Dam and then will back out for remaining funds required for completion of the project. If our Iran-Pak gas pipeline and Diamer Bhasha Dam are also messed up, then Pakistan will be economically destroyed and our nation will never recover from this economic disaster. Wisdom of our leaders of the ruiling party is being checked by Pakistani nation and Pakistani nation is in general very sad on abondonment of Kalabagh Bagh Dam by leaders known to every Pakistani.
Pakistan should go ahead without fear of anyone to complete this vital project. Not only it will help in solving energy crises but also in the future it will be a source of revenue as eventually India would utilize this infrastructure. Same goes with oil pipeline. US can take a hike.