Not only would President Zardari sign a deal on the I-P project, Iran will also set up an oil refinery in Gwadar, Balochistan. PHOTO: FILE
Despite mounting US pressure, President Asif Ali Zardari has decided to travel to Tehran this week to finalise a multibillion dollar gas pipeline deal, officials revealed on Sunday.
Under the agreement, Iran would offer a loan of $500 million to Pakistan for the construction of a gas pipeline on its side of the border. However, the project has run into trouble due to an absence of investors fearing economic sanctions by the United States.
A foreign ministry official confirmed to The Express Tribune that President Zardari will begin a two-day visit to Iran on Tuesday to finalise the much-anticipated deal.
The official, requesting anonymity, disclosed that Washington was pushing hard to convince Islamabad to abandon the project.
“But we feel that the project is important for our future energy needs and we will pursue it at all costs,” he added.
Meanwhile, at his weekly briefing on Thursday, the foreign ministry spokesperson rejected reports of US pressure insisting that the Iran-Pakistan (I-P) gas pipeline project was “enormously important” for Pakistan.
“We are an energy deficient country. It is in our national interest to have this project,” Moazzam Ali Khan asserted.
Not only would President Zardari sign a deal on the I-P project, Iran will also set up an oil refinery in Gwadar, Balochistan, it was revealed.
And both the formal agreements would be inked between leaders of the two countries during the president’s upcoming visit to Tehran.
The $4 billion refinery is slated to be constructed in the port city of Gwadar with an estimated capacity of about 400,000 barrels per day.
The proposed cooperation between Islamabad and Tehran is likely to invite more pressure from Washington, sources say.
The US State Department said on Saturday that there were better options available for Pakistan than the I-P project to meet the country’s growing energy demands.
But, Pakistan so far resisted the pressure and has decided to go ahead with the project.
Last week, the Iranian oil minister visited Islamabad and said Tehran would start supplying natural gas to Pakistan by December 2014.
Published in The Express Tribune, February 25th, 2013.
COMMENTS (36)
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Picture of the region is getting change. Nuclear armed states is coming closer to each other. Two impoprtant countries of the region going to ink an agreement. Conciliation efforts are already under way between government of Pakistan and taliban hope would successful. United States and coliation Nato forces stationed in Afghanistan for more than decade is expected withdrawal in 2014 hope would never come back to. So in the whole scenario agreement with iran on the gas pipeline is good steps Pakistani leadership put aside American influence and has taken a firm decision to ink agreement with Iran no doubt is a brave step.
@Ali Asghar: "Gawadar port and IP0 pipeline projects are for Pakistan and mainly for stabilizing Balochistan. " From all indications, Buloch beg to differ. Both projects will be sitting ducks in their cross-hairs!
@Pakistrani: "If US impose any sanction then we should not allow (US owned ) Turkmenistan-Afghanistan-Pakistan-India (TAPI) Gas pipeline to enter Pakistan’s territory." Yeah! That should teach the yanks. Boy, Pakistanis have an answer for everything. What happened to the threat that you would ask your brothers in ummah to deny the lifeblood of American economy -the oil - to them? Any one doing anything about that threat?
@Khan Bhai: " Now they have completely retracted on those promises." Just like you didn't keep your promises of "till Death do us part". It works both ways, chum!
@Pakistrani
The USA isn't going to get any oil/gas from the IP or TAPI so maybe you can explain how stopping TAPI harms anyone but Pakistan, Turkmenistan and the end users of that oil/gas? Most people don't realize that currently the USA a net exporter of energy and is on tract to become the largest oil producer in the World by 2020 - big downer for OPEC and the anti American crowd.
The PPP may not win the election as portrayed by media. But Zardari will remembered for foreign Policy achievements namely, China, Iran and India relations in spite of all odds against Pakistan. Pakistan was left out by America and NATO on withdrawal troops and Talliban negotiations; where as now we have become integral part of it.
Mr. Najam Sethi; is Pakistan's foreign policy still solely being dictated by Army or politicians do have to play some part?
A Peshawary
@just_someone: It is not just America but even Saudi Arabia would oppose the Project. Pakistan cannot take KSA headon. Iran doesnot have enough money to provide aid to Pakistan. Pakistan cannot side with Iran against Saudis. Please get real.
Gawadar port and IP0 pipeline projects are for Pakistan and mainly for stabilizing Balochistan. If these steps should not have taken , we americans and indians would have sepereated balochistan from us. What do you people think that why India was crying over these projects? Just because their plots were diminished by this. thats it.
Good move President. Pakistan must be committed to pursue this project till its completion despite mounting threats of sanctions on Pakistan. Hats off.
these are all gimmicks...what Pakistan needs is cheap hydro electricity +++++++++++++++++++++++++++++++++++++++ Better seek Indian expertise and start hydro plants asap.
"Uncle Sam" you are not in a position to threat Pakistan !
If US impose any sanction then we should not allow (US owned ) Turkmenistan-Afghanistan-Pakistan-India (TAPI) Gas pipeline to enter Pakistan's territory.
Pakistan can also slap sanctions on US .
If Zardari does so then he shall do a great job by ignoring the huge US' pressure and fear and threat of US' economic sanctions on Pakistan and Zardari also shall prove it that Pakistan is a sovereign and self-reliant country and is free in making and taking steps regarding Pakistan's foreign policies.And if Zardari doesn't do so then he never has to go to Iran.....
The first good thing if he does it in their five year mafiha area, secondly Nwaz sharif blindly criticizing this project to PLz his American gods. no doubt this will be a great project in Pakistani history.
Guess who will be coming to Pakistan from US?
Its the right step. America isnt our ally.
Tis project has been in the 'pipeline' so to say for the last 19 years. IT is only recently that the issue of sanctions came up. Why was it not implemented earlier?
If today there are massive load shedding because Pakistan does not have money to pay for oil, how will Pakistan suddenly get money to pay for gas? Remember the contractual gas price is not the cheap price that you are accustomed to for Sui gas.
In fact f the $1.5 billion cost - 5o million is loan for Iran, rest of the financing also has not been tied up. Apparently it is going to be a cess on utility bills that half the people already don't pay.
This is a positive step and will help Pakistan's dying economy and is related to people directly. I may not agree with all decisions by Zardari but this one is legit. People of Pakistan need to come forward on this decision to help themselves if they want to come out of US umbrella after American and NATO forces leave Afghanistan by the end of 2014.
The timing amounts to passing the monkey to the back of the next Govt. ++++++++++++++++++++++++++++++ Shouldnt the election commission ensure that the present regime doesnt take such "policy" decisons?
I am not PREZ ZARDARI FAN but he takes bold steps and knows how to play Chess,Great job Mr. President.
@Ch Allah Daad: Think Positivly & set aside your personal hatred against PPP
Is it not the function of the prime Minister?
Rex Minor
In essence the Iranian's have agreed to fund the start-up cost and a portion of the pipeline - now all you have to do is come up with the remaining Billion+ and then find the money to buy the gas and repay the $500 million. Zardari says he's going to do that by raising your taxes and putting a surcharge on fuel -- of course if that was practical solution you could have done that years ago and purchased energy anywhere on the World market. The term "pipe dream" comes to mind.
Ink this deal and let the construction start before the elections. There is no predicting what would happen after them. Especially with an angry Uncle Sam breathing angrily down our necks.
Finally, Pakistan is acting on its own interests and not anyone else's!
Zardari is most intelligent leader i have seen since the days of Ayub Khan. Since, its expected that PML N will win the upcoming elections, Sharifs will have to bear all the threat of sanctions.
A great step if he actually does it!!
This project is a politicle stunt like Bhasha dam.This is not going to materialise in next decade.This is ppp master in giving sweet pils.American pressure is a good excuse for ppp what is then the point in not making Bhasha dam.This is a party of thugs.Believe it or not.
ask USA to give us rights of Jhelum - no indian dam on it. next govt may abondon this plan under US pressure so keep room for that. hope no default penalty
This project is obviously in Pakistan's best interested to undertake this. My personal impression is that the US is just engaging in a stare-down and hoping Pakistan blinks first. I do not think that the US will impose any sanctions on Pakistan, at least not till the end of 2014 which is when they are slated to exit Afghanistan. They need Pakistan to move their equipment out and will not impose any sanctions since Pakistan will shut down movement of goods for them as potential retaliation. We should have moved these projects along quicker while the US was in Afghanistan and had them completed by the time the US was exiting so that then it would be impossible for US to demand us to stop buying gas from Iran given we already had a pipeline with them. The more time Pakistan wastes in implementing these, the worse it is for Pakistan.
The question we ought to be asking Americans is where are the Special Economic Zones they promised 4 years go? Now they have completely retracted on those promises. Obama simply can't be trusted.
From Wikileaks cables that I've read, I can confidently say that Zardari doesn't care about pressure, he told Americans boldly that he'll wage war if India attacks. Say what you have to about him, I don't like him either, but he timed this around his exit so he doesn't have to answer anyone.
Also in the news: Zardari will come back from Iran with huge buckets of cash. Meanwhile, after his government leaves, the Iran gas agreement will be scrapped due to inevitable US sanctions which would cripple the economy. And the Government of Pakistan will be forced to sign off the investment it made in the pipeline during Zardari's tenure.