Iran's President Mahmoud Ahmadinejad (L) shakes hands with Pakistan's President Asif Ali Zardari during a ceremony marking the start of work on the 780-kilometre (485-mile) pipeline from Iran to Pakistan. PHOTO: AFP
The contentious gas pipeline was inaugurated by Zardari as he pulled the rope to reveal the foundation-laying plaque on the Pak-Iran border for the 1,600 kilometre long pipeline.
A 300-member strong Pakistani delegation led by President Zardari and comprising the country’s foreign minister, petroleum minister and National Assembly speaker and a number of prominent politicians attended the historic ceremony.
Foreign ministry spokesperson Moazzam Ali Khan said several heads of states had also been invited at the inauguration — an event that will see the two neighbouring states sign a crucial yet controversial mega project aimed at easing Pakistan’s energy crisis. However, he refused to give any further details.
One official pointed out that the high-powered inauguration clearly indicated that Pakistan would pursue the project at all costs.
Iran has completed 900 km (560 miles) of pipeline on its side of the border and Iranian contractors will also construct the pipeline in Pakistan, Iran's national broadcasting network IRIB reported.
Tehran has agreed to lend Islamabad $500 million, or a third of the estimated $1.5 billion cost of the 750 km Pakistani section of the pipeline, Fars news agency reported.
The two sides hope the pipeline will be complete in time to start delivery of 21.5 million cubic metres of gas per day to Pakistan by December 2014.
The US has issued warnings to invoke economic sanctions already in place against Iran if Pakistan went ahead with its plans to import natural gas from the Islamic republic.
The United States has steadfastly opposed Pakistani and Indian involvement, saying the project could violate sanctions imposed on Iran over nuclear activities that Washington suspects are aimed at developing a weapons capability. Iran denies this.
India quit the project in 2009, citing costs and security issues, a year after it signed a nuclear deal with Washington.
You can view a slideshow of the inauguration ceremony here.
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The groundbreaking ceremony of the Iran-Pakistan gas pipeline project performed jointly by President Asif Ali Zardari and President Mehmoud Ahmadinejad at Gabd, located in Iran close to Pakistan border, on Monday was, by all logic, a giant leap in history. For the Pakistan government that has not, at least during the past five years or so, been known much for disregarding the US command or counsel to suddenly ignore the threat of sanctions is an act of no small courage. Overwhelmed by financial constraints, it looks up to Washington for relief through international financing institutions like the IMF to which it is at present heavily indebted and might have to have recourse for another package to bail itself out. Sanctions at this stage would further hamper the already crippled economy to get reactivated. Going ahead with building the pipeline signifies that Pakistan has finally realised that its salvation lies in aggressively pursuing a policy of fulfilling energy requirements. Economic networking with Tehran and through Gwadar with Beijing would make for regional cohesion of common interests and would largely go towards enabling us to meet the challenge emanating from our eastern border. Viewed from that angle as well, the decision to pursue the long-delayed project was a strategic move of sterling significance for Pakistan and stability in the region. And that might also persuade the leadership in New Delhi to see the advantages of living in harmony with neighbours, respecting their right of sovereign status and eschewing its hegemonic ambitions. No doubt, it would also have a positive impact on integrating Central Asian States with this region. President Asif Ali Zardari indeed deserve a big hand of applaud.
Gas tarrif will be benificial for Pakistan and the country will earn doller comming from it's consumers , But there are several hurdles . Terrorism and counter terrorism are there in the way .......
Guess the pressure is more on the outside than the insides of the pipeline :o)
well i would like to congratulate the people at least we have courage to start such projects for the well being of our country, but i have few questions.
1) the cost at which we will import this gas is too much and that is 13 US $ /MMBTU. compared to the cost given to companies in Pakistan government or private which starts from 2.57 $ / MMBTU to upto 8 $ / MMBTU.
2) If we would have given incentive to the companies who are already working in our country and give them a price rise of 10-20% and link it with that they should increase production about 25% in next three years it would have also given the same result with more jobs and prosperity to our country.
3) our country currently produces 3482 MMSCFD of gas and we have kick off the project for 750 MMSCFD whcih 20% of our current production now we will pay nearly 50% more for gas at our home coz we have injected some less gas in our system but expensive gas in to gas network.
4) we have done the sale purchase agreement in $ and dollar has sky rocked from 65 to near 100 in last few years so if the dollar goes up the price shall go up, and look Iran has done contract with India that it can pay half the value in Indian currency, we should have also tried to do this agreement in Pak rs.
5) I am mot against this deal, what my point in here is that we could have negotiated well for having Iranian gas. I will prey and work hard for my country to be top 10 countries in world.
Still not voting for PPP. 5 years delay is no excuse.
Beg to differ with several comments calling this the only good thing this PPP government has done during her 5 years tenure. I think it is the second good thing. Number 1 by a wide margin is the fact that they have completed (almost) their tenure and look set to hold elections and handover power to the next parliament. Mark my words, fifty years from now, when Pakistan is a functioning, vibrant, democracy with solid institutions, historians will look back on this PPP government and remember only that they were the first civilian government to complete their term. None of the negative stuff will be remembered.
I am keeping my fingers crossed. I hope nothing goes wrong between now and the elections. There are still a lot of misguided Pakistanis who would like to derail the system once again and start out on another path. If that happens god forbid, bye bye Pakistan.
Chahbahar is in Iranian held Balochistan, and Pakistan would lay the pipe for hundreds of miles in Balochistan it is controlling, with out even providing the local people any benefit of it to power the industrial sector of Punjab and Karachi and we the Baloch's would be bereft of any advancement this project. My heart for the poor Baloch.
@Asghar: 100% AGREED !!!!!!
Well done Mr Zardari, That's true pakistani spirit and we know only you can do this.
This is going to hurt Pakistan's already faltering economy when uncle Sam turns the screws, i.e.,no soft loans from the IMF, cut off from international banking, etc. What Pakistan should've done is called the US' bluff and said OK you provide us with the energy we need at better rates than the Iranian source.
Great strep MASHALLAH
Congratulation Pakistan Iran .....White elephant is weaping
It is a good news but does anyone have details about how it is being funded? Chinese refused & Russians walked away. I am all for this project but not clear about finances. I hope it does not become a pipe-dream.
That this pipeline is extremely important and vital to Pakistan is not in doubt at all. But if this symbolic inauguration it is masterstroke or not ...... only the next 2 - 6 months shall tell. It is boom or burst, a high risk gamble than can also bring in high rewards. Politically it is masterstroke and Zardari has floored both NS and IK. Reports are not clear if firm pricing and off-take agreements have also been executed. I can recall DM dam inaugurated three times. Unless there is a strong "force majeure" clause and built in escape clauses within the contract, this is a high risk gamble. I have read earlier that Iran had insisted on steep penalty clauses in case there is any delay from Pakistan's side. Hope that there are no such penalty clauses in the contract now. Had Zardari been able to build consensus and proceeded with KB dam, it would have been much better. No need to pay for gas, much cheaper electricity but also more water for irrigation and avoidance of flood damages and importantly international funding would have been available. However, KB, the only rain fed dam in Pakistan, had always been a political hot potato, solely due to distrust between provinces and various interested sections. If not handled properly, it would tear up the country. Had KB Dam had been named BB Dam, it may have been completed by now.
@Khadim Ali Manto: The US should grant sanctions waiver to Pakistan like it has done to China, India, South Korea, Sri Lanka, 10 EU countries and Japan and other countries for oil import from Iran. . Do you even know what the waiver is? It allows countries such as India to access the US financial system so long as they cut down on imports from Iran. India was one of the first countries after the EU and Japan to obtain the waiver. Unlike what you might think, it does not allow those countries to purchase oil from Iran. In fact as a result of sanctions, India which was one of the biggest importers or Iranian oil have seen imports from Iran go down to a fraction of what they were before. Ditto for China.
This is a case of counting chicken before they are hatched. Anyway, best of luck to Pakistan.
he proves that he is the best politician in Pakistan.. completing his government term iran gas pipeline and gawadar port to china thums up :)
@Lalai
Can you name one time when this govt has made a "political master stroke" when it comes to foreign policy issues - especially where the American's are involved? I would argue the only "political master stroke" associated with this decision is making a decision knowing that the next administration is going to be held responsible for reversing it. BTW - you should know that America leaving Afghanistan gives them more leverage on Pakistan - not less.
Sole purpose of this so called pipe line is to fool people and win few seats. PPP is master in this field and proof lies in appreciation of this useless project. Its impossible to build pipe line in vast, barren but lawless Baluchistan. If it was possible, Pakistan would have built it many years ago.
@Asghar
very very possible....
Great Job Zardari!!!! Even though your government is about to end in couple of days! But that was Good! Lets Appreciate Presidebt's Zardari effort.
In light of the below article:
http://tribune.com.pk/story/132244/the-myth-of-pakistans-infinite-gas-reserves/
one can conlude that:
"Pakistan due to its mismanaged gas reserves now on others door to buy it".
This is the best of decision taken by Govt. I hope the decision is not taken to prove a point to citizens and gaining some brownie points for coming election.
I hope the construction cost of 1.5 Billion and cost of maintaining it in war ravaged areas the pipeline will run through is factored in and weighed. It should not happen that Pakistan wakes up in 2015 only to find that the cost of transportation by present means was cheaper than by pipeline.
Election gimmick! Mark my words!!!
@showkeen: Pakistan's survival is possible only through having an alliance with Iran, Central Asia, China and Russia. In this regard this pipeline is of utmost importance. The US should be booted out from the region. President Zardari must be applauded for proving himself to be a visionary as he not only solidified our bonds with Iran but was able to get Pakistan observer status in the strategic grouping of Shanghai Cooperation Organization.
The pipeline will never be built. Building it will mean the collapse of Pakistan's economy due to US sanctions.
there are no permanent friends or enemies.. interest is permanent and interest is the only thing which brings the two nation on the same page
Well Mr. President I have to admire your for this step......Pakistan Zindabad
The only good thing this PPP government has done during her 5 years tenure.
one thing is very common in an Indian & a Pakistani. Both will continue show their trust in corrupted leaders (However our Scams are in Multi Billion US$) Brothers this is nothing but an Election Propaganda, that is why you are not seeing a firm American response.
Many people responded here in very good mood, but no one would able to get a single canister of Gas from this pipeline because it will not be there in physical.
Gulam Rasool"Kuldeep sharma" New Delhi
Nice short may PPP's captain on last ball of the over,now next over is election
A political master stroke! Knowing that USA is pulling out of Afghanistan in the next two years, this is the best move for Pakistan, provided the next political government acknowledges it.
PPP has taken a very bold and brave decision in the interest of Pakistan. I have to say that Mr. Zardari is the best politician we have now.
I hate you for every other miseries we face but love you Mr President for this step
Shabaash .... Pakistan Zindabad !!!!
Are we all forgetting the way our President and Prime Minister operate (Kickbacks/Commission structures) ? :)
The US should grant sanctions waiver to Pakistan like it has done to China, India, South Korea, Sri Lanka, 10 EU countries and Japan and other countries for oil import from Iran.
http://in.reuters.com/article/2012/12/08/usa-iran-sanctons-india-idINDEE8B60DB20121208
President Barack Obama's administration has now renewed waivers for all 20 of Iran's major oil buyers, after granting them to Japan and 10 European Union countries in September. F r i day's action was the second renewal for all 20 after Obama signed the sanctions into law a year ago.
The sanctions aim to choke funding to Iran's nuclear program, which the West suspects is enriching uranium to levels that could be used in weapons. Tehran says the program is for civilian purposes.
"The United States and the international community remain committed to maintaining pressure on the Iranian regime until it fully addresses concerns about its nuclear program," Secretary of State Hillary Clinton said in a statement.
Clinton also granted waivers, known as "exceptions," on Friday to South Korea, South Africa, Turkey, Sri Lanka, Malaysia, Singapore and Taiwan.
Under the sanctions law, banks in countries that buy oil from Iran can be cut off from the U.S. financial system unless their purchases decline.
Actually the second good thing: the first one was to let China manage the Gawadar port
haha.. self reliant ?? oh boi this will be used to IMPORT not EXPORT gas !!??
Now watch the next government i.e Nawaz government scrap this project at behest of Saudi Arabia
Well Done President Zardari!!
Heading towards a self-reliant Pakistan!!
Wrong!! this is ONLY good thing government has done!!
Dramatic Turn
The very first bold step by PPP Govt
why ET saying its controversial? Its not contraversial its in best interests of Pakistan, its contraversial for Americans who have no say.
Pakistan should follow International Cooperation US theory, instead of Alliance, with Iran, China, Central Asia and may be Russia -- and create its own block like US-EU. This will really please US Founding Fathers.
Hail Zardari! He has proved himself as a leader.
this is one good thing government has done!! congratulation