Word of caution: Put IP pipeline on hold until sanctions lifted, says US

Published: April 30, 2015
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US State Department’s Special Envoy for Energy Amos Hochstein (2R) in a group photo with Federal Minister for Water and Power Khawaja Asif, Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi. PHOTO: PID

US State Department’s Special Envoy for Energy Amos Hochstein (2R) in a group photo with Federal Minister for Water and Power Khawaja Asif, Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi. PHOTO: PID

US State Department’s Special Envoy for Energy Amos Hochstein (2R) in a group photo with Federal Minister for Water and Power Khawaja Asif, Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi. PHOTO: PID Hochstein suggested that Pakistan should grow its energy basket by generating power through wind, solar, hydroelectric and gas resources. PHOTO: FILE
ISLAMABAD: 

The United States has said that Pakistan should put on hold its gas pipeline project with Iran until sanctions against Tehran are lifted after a final agreement is reached with global powers.

Speaking to journalists here on Wednesday, US State Department’s Special Envoy for Energy Amos Hochstein pointed out that Iran and the global powers, called P5+1 including the US, Britain, France, China, Russia and Germany, were negotiating and moving towards a final deal.

“As long as the agreement is not reached, sanctions are in place and therefore, Pakistan should hold off undertaking any project such as the IP (Iran-Pakistan) pipeline until the removal of sanctions,” Hochstein said.

Raising doubts about Iran’s ability to go for gas exports, he said at present Tehran was a net importer of gas.

Discussing Pakistan’s privatisation programme for energy companies, the envoy said the delegation from Islamabad had informed during a meeting of the US-Pakistan Energy Working Group held under the broader framework of US-Pakistan Strategic Dialogue that three power distribution companies would be privatised next month.

“We are supporting the privatisation of energy companies which is good for attracting investment and improving efficiency,” he said and voiced hope that the government would press on with the sell-off programme keeping in view the previous experience of K-Electric.

Hochstein welcomed Chinese investment of billions of dollars under the Pakistan-China Economic Corridor in energy projects. “We hope projects will move forward and strongly believe Pakistan will achieve energy security.”

Responding to a question about low US investment as compared to China, he said, “We are a different country and not in competition with China. China has its own policy to support the neighbour and we do it in our own way.”

Washington is extending support to Pakistan for enhancing expertise and infrastructure, which is the backbone of energy sector.

The envoy was of the view that Pakistan required a different kind of investment to address the energy problem and said the two sides had also discussed Turkmenistan, Afghanistan, Pakistan and India (Tapi) gas pipeline project and Central Asia-South Asia (Casa-1000) power import project. “We support these projects for regional cooperation.”

Replying to a question about liquefied natural gas (LNG) exports from the US, he clarified that the American government was a regulator and had no role in LNG exports. “Our private sector is independent and Pakistan should buy from it if it wants,” he said, terming LNG a game-changer.

The US is going to become an LNG exporter in 2016 due to reforms in the energy sector. The base price of gas there is $2.60 per million British thermal units (mmbtu).

Hochstein suggested that Pakistan should grow its energy basket by generating power through wind, solar, hydroelectric and gas resources. During the talks, it was agreed that Pakistan would be producing 3,000 megawatts through renewable resources in the next three years.

Speaking about coal-based power plants, the envoy said investment in these plants was not good for the future.

In order to push ahead with the gigantic Diamer-Bhasha dam project, the government is going to conduct different studies including those that focus on environmental impact and financing needs. “An assessment is required to prove that the project is technically sound as donors are coming up with $15-billion financing,” said a USAID official, who was present on the occasion.

According to Hochstein, energy demand in Pakistan is expected to double by 2020, so the country should institute reforms to provide support for the private sector.

In the energy sector assistance programme, the US has contributed over 1,500MW to Pakistan since 2010 by refurbishing hydroelectric and thermal power generation facilities, completing hydel projects and improving the efficiency of transmission and distribution system.

Published in The Express Tribune, April 30th, 2015.

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Reader Comments (7)

  • Ridwan
    Apr 30, 2015 - 1:43AM

    So USAID supports the Diamer-Bhasha dam? I wonder how that makes India feel. And also, this pipeline is being pushed by china.Recommend

  • woody
    Apr 30, 2015 - 4:54AM

    Raising doubts about Iran’s ability to
    go for gas exports, he said at present
    Tehran was a net importer of gas.

    Yep – ask Turkey how much gas they get from Iran during the winter. Recommend

  • abreez
    Apr 30, 2015 - 8:20AM

    Currently inflation in Iran is around 16% and during American sanctions, Iran was enjoying 35% inflation rate. Pakistan should protect its personal interest and these are
    1. Healthy relations with Iran and Afghanistan, non-interference in internal affairs of these countries.
    2. Healthy relations with Iran will make people of Iran prosperous when people of China will travel by road to Europe and people of Europe will travel by road to China. Rail and road travels will give government of Iran an opportunity to sell its oil products on any desired price. Rail and road travels will increase jobs opportunities in Iran and that thing will make people of Iran more and more rich. When people of Iran will rich then Iran will again enjoy high inflation rate and high inflation rate in Iran and Turkey will benefit business community in Pakistan.Recommend

  • SK
    Apr 30, 2015 - 8:28AM

    oh ok, I thought US respected Pakistan’s democracy and people’s willRecommend

  • AVMPolpot
    Apr 30, 2015 - 8:37AM

    ” In order to push ahead with the gigantic Diamer-Bhasha dam project, the government is going to conduct different studies”
    ++++++++++++++++++++++++++++++++++++++
    and come to the same conclusion as the Chinese….stay away.Recommend

  • AVMPolpot
    Apr 30, 2015 - 8:42AM

    ” S-Pakistan Strategic Dialogue ”
    ++++++++++++++++++++
    buried under Gwadar……Recommend

  • unbelievable
    Apr 30, 2015 - 11:53PM

    @woody:

    Raising doubts about Iran’s ability
    to go for gas exports, he said at
    present Tehran was a net importer of
    gas.

    Zardari didn’t bother to do any “due diligence” before signing a binding contract with Iran – that includes a simple phone call to Turkey to ask whether Iran honors it’s agreements. Zardari signed the agreement not knowing how much it would cost, who would build it, how he would finance it, or whether Iran would honor the terms. He didn’t care – just wanted to spit in the eye of the USA and leave a turd for Sharif to handle. Chest thumping at it’s worst.Recommend

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