The United States (US) is still sticking to its stance on the Iran-Pakistan (IP) gas pipeline project despite the recent P5+1 nuclear interim (six month) deal and has advised caution in proceeding with a project that would take one a half years to complete.
On a query of Business Recorder the spokesperson of the US Embassy in Pakistan after receiving a written response from Washington DC stated “It is too early to know to what degree the recent P5+1 accord with Iran will affect our policy. We have made it clear that it is best to avoid activity that may be sanctionable under US or international sanctions.”
Under the accord, signed in June 2010, Iran would provide 750 million cubic feet per day (MMCFD) of gas to Pakistan for 25 years, which may be extended by five years and volumes may rise to 1 Billion Cubic Feet per Day (BCFD). On March 11, 2013 – five days before the end of PPP-led coalition government’s term – the IP gas pipeline project was inaugurated by the presidents of the two countries namely Ahmedinejad and Zardari. The government of Iran committed $500 million for construction of pipeline on Pakistan’s territory, while Pakistan has requested the Iranian government to enhance funding from $500 million to $1 billion – a request that Iran has turned down. However, according to reports Iran has agreed to renegotiate the price earlier agreed as requested by the PML-N government.
The US is well aware of Pakistan’s severe energy shortages and Washington DC in its response to the Business Recorder query stated: “We recognises Pakistan has significant energy requirements, but there are more reliable and less expensive solutions to Pakistan’s gas needs. The United States is doing its part to help alleviate the energy crisis in Pakistan by supporting large-scale energy projects that will add 1000 megawatts to the power grid by the end of 2013 – enough power to supply electricity to estimated 14 million people.”
The cost of gas from IP is estimated at $12 per mmbtu while that from US supported Turkmenistan-Afghanistan-Pakistan-India (TAPI) is $13 per mmbtu. The cost of LNG imports is higher at per mmbtu.
Author: Abdul Rasheed Azad & Ali Hussain
Source: Business Recorder