Iran gas pipeline: ‘US refuses to exempt project from sanctions’

Published: November 20, 2013
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Pakistan moves ahead with TAPI project after being assured it will not have to arrange the needed funds. PHOTO: FILE

Pakistan moves ahead with TAPI project after being assured it will not have to arrange the needed funds. PHOTO: FILE

ISLAMABAD: 

The United States has refused to exempt the Iran-Pakistan (IP) gas pipeline from possible sanctions against Iran, creating even more uncertainty about the future of the project.

Pakistan had, earlier, given government guarantees pertaining to the IP pipeline to Iran, making it difficult for the present government to back out from the project.

Due to the threat of sanctions, however, Islamabad has been unable to secure the required funding for the IP pipeline. It even placed a $2 billion request before the Iranian government in order to finance the project.

According to sources, Pakistan most recently took up the issue with US authorities at a meeting on the sidelines of the revised bilateral strategic dialogue in Washington last week. However, the US did not give any assurance that it would exempt the IP pipeline from sanctions.

“We are evaluating the project at this stage and cannot give it exemption from possible US sanctions,” an official privy to developments quoted the officials as saying.

On the other hand, sources said the US pushed Pakistan to move ahead with the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project instead. They added that Pakistan was assured the pipeline-building and gas exploration contracts for the TAPI project would likely be awarded to US companies like Chevron, thus relieving it of the responsibility to secure finance for the initiative.

All countries participating in the TAPI project gathered in Ashgabat, Turkmenistan to sign a transaction advisory contract with the Asian Development Bank soon after the Pakistan-US dialogue concluded, according to the sources. The bank will help generate funds for the project, they said.

Pakistan had earlier requested the exemption of the IP project from sanctions during Prime Minister Nawaz Sharif’s visit to the US.

The matter was also raised during US Secretary of State John Kerry’s visit to Pakistan as well. Kerry was reportedly handed a paper urging Washington to consider exempting the project from any sanctions against Iran.

No positive response has been received from the US so far, however.

Instead, Washington has been asking Pakistan to look into other initiatives to meet its energy needs. Recently, the US offered Pakistan assistance in shale gas exploration and the import of liquefied natural gas in a bid to dissuade it from pursuing the gas deal with Iran.

Pakistani officials, on the other hand, consider the IP pipeline most viable for meeting the country’s growing energy demands.

At the same time though, the project remains in doldrums because of US and EU sanctions against Iran, due to which the latter has been unable to develop its South Pars gas fields.

Published in The Express Tribune, November 20th, 2013.

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Reader Comments (5)

  • Aschraful Makhlooq
    Nov 20, 2013 - 10:42AM

    This US’ statement is definitely an alarm and indication that Pakistan shall face US’ sanctions if Iran-Pakistan gas pipeline project gets started and the US’ harmful inner intentions for Pakistan and Pakistan’s advancements and developments to get sovereignty and to overcome electricity and gas crises in Pakistan and in the other words this has been definitely confirmed that US never wants to stand Pakistan on its own feet.When Pakistani slaves leaders shall differentiate between friends and enemies or intentionally don’t want to differentiate despite knowing all facts?????

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  • unbelievable
    Nov 20, 2013 - 8:36PM

    USA has been perfectly clear on this issue from Day 1 – either Pakistan doesn’t speak English or just doesn’t want to hear. IP has been a shame from inception – political ploy who’s only goal has been to make inept politician’s look like they are solving energy crisis.

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  • Asad Khan
    Nov 20, 2013 - 8:49PM

    @Aschraful Makhlooq:
    They are not that naive they fully knew that fact, but they don’t have the guts to stand with the people for the people. All they wants is diversions, like sectarian clash, waste time on Article 6 etc.

    Oil / Gas sector is like a coin, one side is economic the other is geopolitics.

    regards,

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  • Dr Asim Khalid
    Nov 23, 2013 - 3:38AM

    Quote of A senior official of Ministry; Sad and disappointing, the Senator Syeda Sughra Imam also tried her best to convince US over this people friend project but all in vain. The presentation of Shahid Khaqan Abbasi failed to impressed American.

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  • gp65
    Nov 25, 2013 - 5:50AM

    @Aschraful Makhlooq: The US-EU sanctions against Iran are not Pakistan specific. All countries are impacted by it. Secondly even at the time when Zardari signed the contract – US had made it clear that the country could do what it wanted but it should be aware that there were sanctions against IRan which would be attracted by any project that increases trade with IIran. At that time there was a lot of chest thuming that we will make the pipeline at any cost – knowing full well that Pakistan did not have money to pay for buidling the pipeline. It was simply using Iran to try to get KSA or US to loosen its purse strings.

    Now that there has been a deal reached by US, France, UK, Russia, China with Iran there will be some relief on the sanctions to Iran. Guess which countries were opposed to the relief on sanctions? Saudi Arabia and other Arab countries.

    Once the smoke screen of US sanctions can no longer be used, we will see if Pakistan dares to defy Saudi Arabian orders and build the pipeline.Recommend

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