Pakistan will press the United States to exempt the multibillion-dollar Iran-Pakistan (IP) pipeline project from sanctions during the revised strategic bilateral dialogue, which kicks off in Washington on November 12.
The $7.5-billion project has faced repeated delays since it was conceived in the 1990s to connect Iran’s giant South Pars gas field to consumers in Pakistan and India.
The Washington dialogue – which is a followup to Prime Minister Nawaz Sharif’s recent visit to the US – will focus on revising relations between the two countries, especially with regards to Pakistan’s energy needs.
The Pakistani delegation will be jointly led by Petroleum Minister Shahid Khaqan Abbasi and Power Minister Khwaja Asif.
Officials privy to the development told The Express Tribune that the delegation will raise the issue of possible US sanctions against the IP project because it is essential for meeting the country’s growing energy demands.
According to an analysis prepared by the petroleum ministry, replacing furnace oil used for power generation with gas imported from Iran will result in annual savings of $2.4 billion.
The officials said that progress on the IP project will depend on the outcome of the revised dialogue which would be the final round of deliberations on the issue.
The United States has steadfastly opposed Pakistani and Indian involvement in the project, saying it could violate sanctions imposed on Iran over nuclear activities Washington suspects are aimed at developing an atom bomb – a charge denied by Tehran.
Instead the US has been urging Pakistan to go for the Turkmenistan-Afghanistan-Pakistan-India (TAPI) project. US and European Union sanctions against Iran have also stalled progress on the IP pipeline since the country has not been able to import the technology needed to develop the South Pars gas field, the officials told The Express Tribune.
Meanwhile, the officials said that the Pakistani delegation will also discuss the possibility of striking a civil nuclear deal similar to the one the US has with India.
On the other hand, the US is expected to offer Liquefied Natural Gas (LNG) at cheaper rate in an attempt to discourage Pakistan from pursuing the IP project, according to sources. Over the next few years, the US will emerge as a potential exporter of LNG after the discovery of shale gas reserves which have led to a decline in prices.
Published in The Express Tribune, November 10th, 2013.