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Iran-Pakistan gas pipeline: a case that deserves greater attention

Published March 22, 2024
In January, Iranian Foreign Minister Hossein Amir Abdollahian presented a workable solution with a proposal that the project can be financed by China and Russia if Islamabad is facing resistance because of the US sanctions on Tehran. Photo: APP
In January, Iranian Foreign Minister Hossein Amir Abdollahian presented a workable solution with a proposal that the project can be financed by China and Russia if Islamabad is facing resistance because of the US sanctions on Tehran. Photo: APP

The first 80 kilometers of the Iran-Pakistan gas pipeline project have been approved for development inside Pakistan’s borders. The pipeline has been planned for decades, but Pakistan has failed to meet deadlines for the start of the project.

The pipeline’s failure casts some doubt on Pakistan’s capacity to successfully manage difficult diplomatic discussions in order to protect its national interests, as well as on the country’s credibility as a development partner.

Pakistan reportedly made the latest declaration to begin construction on its portion of the pipeline in order to avoid potentially paying a $20 billion fee. Pakistan was forewarned by Iran last year to complete construction of its portion of the pipeline by March 2024 or suffer billion-dollar financial penalties. Tehran warned that it will take the matter up with the International Criminal Court, which could leave Pakistan deeply in debt to its neighbour.

Discussions continue on IP gas pipeline project: US

Although Pakistan says the project is in its national interest, it has not taken any tangible steps. Iran, on the other hand, has already finished construction on its portion of the pipeline, having spent $2 billion.

Although the pipeline’s construction is significant, what matters more is how poorly Pakistan has handled the situation, giving the impression to Iran and other international stakeholders that the government couldn’t keep its word and defend its interests.

For example, Pakistan has maintained for decades that it is unable to finish the project on its side of the border because of US sanctions against Iran. Given that energy shortages have had a devastating impact on Pakistan’s economy over the past ten years, this is an overly simplistic statement and a weak defence of its position when it comes to national interest initiatives.

GIDC funds to be used towards IP gas pipeline

Pakistan has been referred to as America’s close partner on numerous occasions for various reasons. Pakistan may have had significant influence to negotiate a deal on the project during the more recent tenacious period of cooperation with the US during the war on terror.

As a US ally in the fight against terrorism, Pakistan arguably had a lot of leeway to plan and strike agreements to clear the path for the project’s construction.

It’s likely that relevant officials at the time did not strongly support or commit to the construction because they did not think the matter was important enough. Or because they thought the US and the war on terror would last, and that they would address the matter at some point down the road.

We have used this poor strategy to manage the economy and matters of national interest in numerous other contexts. We put everything on hold until we reach a point where, as a country, we have to plead for assistance from foreign players while carrying a heavy burden of damaged credibility and mistrust.

IP gas pipeline project: CCoE decides to start work on first phase

Pakistan has already contacted the US to request a waiver of the restrictions imposed on the Iran-Pakistan gas pipeline, as reported in the news. It is probably done to show Tehran that we are doing what we can to bypass a layer of restrictions keeping us away from building the pipeline.

It is unclear why, at a time when the US’s interest and focus on Pakistan are at an all-time low, the US, under President Joe Biden’s administration, will allow Pakistan to build a pipeline with Iran.

For example, to win over voters before a pivotal election later this year, Biden would not want Donald Trump, his Republican opponent and fierce opponent of Iran, to disparage him during the election campaign by pointing to his support of Iran’s gas pipeline for Pakistan.

Furthermore, no one in the US wants to be perceived as supporting Iran in any way, even if it means making headlines for something as trivial as helping Pakistan with its energy problems.

This is especially true given the current Middle East crisis and Israel’s months-long military aggression and the atrocities committed in Gaza. Many in the US administration and opposition politicians are almost entirely convinced that Iran is supporting numerous groups in the Middle East.

Resurrecting dead IP gas pipeline project

For years, we had this issue low on our list of priorities. Unfortunately, India, which was once member of the Iran gas pipeline project, withdrew by using it as leverage in its discussions with the US to secure a civilian nuclear accord. Could we have taken a similar action, or at the very least, engaged in more robust negotiations by bringing up our energy problems and making the point that the matter also benefited the US?

If the project had been built effectively inside Pakistan, there was a chance that India would eventually become involved. Gas near India’s borders may have even made New Delhi an unlikely ally with Pakistan to press for any concessions from the US, as the project’s expansion to India may have enormous benefits for that country as well.

But for any of this to be successful, Pakistani policymakers must reevaluate what they want most and choose a course that not only creates opportunities for collaboration and development but also serves as a rationale for forging agreements with countries like India to engage in negotiations with the US.

This may seem like a silly idea, but that’s what nations are supposed to do—think creatively and find unconventional solutions to seemingly insurmountable problems. Even if it means thinking about turning their enemy into allies.

And this is precisely what nations in difficulty, like Pakistan, ought to be considering to avert problems and safeguard their interests.

The article does not necessarily reflect the opinion of Business Recorder or its owners

Umair Jamal

The writer is Head of the Political Desk at Business Recorder (Digital)


200 characters
KU Mar 22, 2024 11:30am
India is allowed to buy Russian crude oil and sells refined fuel for $85 billion, China over the years has bought over $80 billion crude oil from Iran, but Pakistan has to beg for permission? US rule?
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Ch. K A Nye Mar 22, 2024 03:31pm
@KU, Uncle Sam says "jump" and we say "yes massah, how high massah". There is no way that the USofA is going to allow the pipeline to be built.
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test Mar 22, 2024 03:33pm
Pskistan cannot even complete a gas pipeline project World is competing to get chip foundries & chip fabless factories while elite class of pakistan is competing with each other to beg for imf dollars
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test Mar 22, 2024 03:36pm
One elite class brought CPEC & other elite class damaged it One brought Iran Pakistan gas pipeline & other elite class destroyed it One elite sold reko diq & the other brought it i mean our resources.
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Sumaroo Mar 23, 2024 01:26pm
Waste of time!
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KhanRA Mar 24, 2024 04:44pm
This pipeline is dead until sanctions on Iran are lifted. Pakistan cannot fund it, and no bank will loan money for a project that will be sanctioned by the US. And we will be sanctioned too!
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KhanRA Mar 24, 2024 04:45pm
@KU, India and china are economically powerful. Pakistan still begs to IMF in Washington DC because the economy will collapse otherwise. Neglect education, this is the result.
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KhanRA Mar 24, 2024 04:47pm
@test, this is what happens when a nations with no purpose ignores education - no growth in its economy. All the focus is an Islam, not on tangible results.
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KU Mar 25, 2024 03:03pm
@KhanRA, ''And we will be sanctioned too!'', is the point. Does being economic power give them a pass or is this the new world trade order? What about sanctions on them? Its ridiculous and unjust.
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John Mar 28, 2024 02:29pm
Puppets do not have spines!
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Khwaja Usman Mar 29, 2024 01:32pm
Saudis who have generously donated billions of dollars and oil credit, wouldn't be pleased with this. Publicly they may not express this but risking Saudis wrath is plain stupid. Poorly conceived plan
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Khwaja Usman Mar 29, 2024 01:42pm
We are solely dependent on Saudis for oil imports. This poorly planned project not only jeopardises relationship with US but also Saudis.
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Test Mar 29, 2024 03:29pm
@KU we should not displease US what if they will not allow us to visit US what our people will do then
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