• 13 hours Oil Prices Rise After API Reports Major Crude Draw
  • 14 hours Citgo President And 5 VPs Arrested On Embezzlement Charges
  • 14 hours Gazprom Speaks Out Against OPEC Production Cut Extension
  • 15 hours Statoil Looks To Lighter Oil To Boost Profitability
  • 16 hours Oil Billionaire Becomes Wind Energy’s Top Influencer
  • 17 hours Transneft Warns Urals Oil Quality Reaching Critical Levels
  • 18 hours Whitefish Energy Suspends Work In Puerto Rico
  • 19 hours U.S. Authorities Arrest Two On Major Energy Corruption Scheme
  • 1 day Thanksgiving Gas Prices At 3-Year High
  • 1 day Iraq’s Giant Majnoon Oilfield Attracts Attention Of Supermajors
  • 2 days South Iraq Oil Exports Close To Record High To Offset Kirkuk Drop
  • 2 days Iraqi Forces Find Mass Graves In Oil Wells Near Kirkuk
  • 2 days Chevron Joint Venture Signs $1.7B Oil, Gas Deal In Nigeria
  • 2 days Iraq Steps In To Offset Falling Venezuela Oil Production
  • 2 days ConocoPhillips Sets Price Ceiling For New Projects
  • 4 days Shell Oil Trading Head Steps Down After 29 Years
  • 4 days Higher Oil Prices Reduce North American Oil Bankruptcies
  • 5 days Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 5 days $1.6 Billion Canadian-US Hydropower Project Approved
  • 5 days Venezuela Officially In Default
  • 5 days Iran Prepares To Export LNG To Boost Trade Relations
  • 5 days Keystone Pipeline Leaks 5,000 Barrels Into Farmland
  • 5 days Saudi Oil Minister: Markets Will Not Rebalance By March
  • 5 days Obscure Dutch Firm Wins Venezuelan Oil Block As Debt Tensions Mount
  • 5 days Rosneft Announces Completion Of World’s Longest Well
  • 6 days Ecuador Won’t Ask Exemption From OPEC Oil Production Cuts
  • 6 days Norway’s $1 Trillion Wealth Fund Proposes To Ditch Oil Stocks
  • 6 days Ecuador Seeks To Clear Schlumberger Debt By End-November
  • 6 days Santos Admits It Rejected $7.2B Takeover Bid
  • 6 days U.S. Senate Panel Votes To Open Alaskan Refuge To Drilling
  • 6 days Africa’s Richest Woman Fired From Sonangol
  • 7 days Oil And Gas M&A Deal Appetite Highest Since 2013
  • 7 days Russian Hackers Target British Energy Industry
  • 7 days Venezuela Signs $3.15B Debt Restructuring Deal With Russia
  • 7 days DOJ: Protestors Interfering With Pipeline Construction Will Be Prosecuted
  • 7 days Lower Oil Prices Benefit European Refiners
  • 7 days World’s Biggest Private Equity Firm Raises $1 Billion To Invest In Oil
  • 8 days Oil Prices Tank After API Reports Strong Build In Crude Inventories
  • 8 days Iraq Oil Revenue Not Enough For Sustainable Development
  • 8 days Sudan In Talks With Foreign Oil Firms To Boost Crude Production
Alt Text

Tesla To Spike, Then Crash

Electric car giant Tesla is…

Alt Text

The Surprise Winners Of The Oil Price Rally

The recent rally in oil…

Nick Cunningham

Nick Cunningham

Nick Cunningham is a freelance writer on oil and gas, renewable energy, climate change, energy policy and geopolitics. He is based in Pittsburgh, PA.

More Info

Iran-Pakistan Pipeline Receives Boost from Nuclear Deal

Iran-Pakistan Pipeline Receives Boost from Nuclear Deal

The Iran nuclear deal could provide Iran’s neighbors with an opportunity to import natural gas.

Iran sits on the world’s second largest reserves of natural gas, but most of the country’s gas fields are underdeveloped. Despite vast natural gas resources, Iran has never really fulfilled its potential as a major exporter of natural gas. More than 90 percent of its natural gas exports go to Turkey.

Iran’s eastern neighbors have not benefitted from their strategic location next to such an important energy player. Much of that has to do with the dearth of pipeline capacity that would better connect Iran to the rest of the Middle East and South Asia.

There is one major pipeline project that has been on the drawing board for years that may now move forward given Iran’s reentry into the international community. Iran has been eager to build a natural gas pipeline to Pakistan and India, a project that would benefit all three countries. This would allow Iran to tap into a hungry market for its gas, and Pakistan and India could access much needed energy for electricity. The pipeline has been in the works for years but essentially on hold due to U.S. opposition. The U.S. has sought to block the project in order to isolate Iran and deny it of export earnings. Related: This Is Why Oil Markets Shouldn’t Worry About Iran’s Comeback

Iran completed its section of the pipeline on its territory in 2013, but the remaining route through Pakistan has been blocked due to international pressure. Western sanctions deterred Pakistan and India from following through. Instead, the U.S. heavily backed an alternative route, which would run from gas fields in Turkmenistan through Afghanistan, connecting to Pakistan and India. That project has not moved forward either.

Nicknamed the “Peace Pipeline” because it would tie together several countries that have had rivalries in the past, the Iran-Pakistan pipeline project received a crucial boost with the nuclear agreement, which could remove hurdles to investment and construction. The extension to India is not on the table right now, but connecting the pipeline to Pakistan looks increasingly likely. Related: Mexico’s First Offshore Auction A Major Disappointment

Pakistan’s Petroleum Minister Shahid Khaqan Abbasi responded to news of a historic agreement between Iran and the West by saying that the gas pipeline could begin operations by the end of 2017. “Removal of sanctions will facilitate us in meeting our commitments and addressing our energy needs,” he said in an interview with the Islamic Republic News Agency, and reported by UPI.

In fact, Pakistan got a head start on the pipeline, lining up financing from China earlier this year to build its section of the project, which will run from Gwadar to Nawabshah. A second section from Gwadar to the Iranian border also needs to be constructed, and that portion will be built by Pakistan itself. “We’re building it,” minister Shahid Khaqan Abbasi told The Wall Street Journal in April when Chinese President Xi Jingping visited Islamabad. “The process has started.” Related: This Is Why Californians Pay More For Their Gasoline?

The need is obvious. Pakistan suffers from chronic electricity blackouts amid a shortage of capacity and fuel. Pakistan regularly sees gas shortfalls of around 2 billion cubic feet per day (bcf/d), a deficit that swells to 2.5 bcf/d in winter. The pipeline with Iran could allow 750 million cubic feet of natural gas to flow into Pakistan each day when fully operational, with around one-third of that coming online by the end of 2017.

When completed, Pakistan could tap into an additional 4,500 megawatts of electricity capacity. The WSJ says that Pakistan’s portion of the pipeline could cost $1.5 to $1.8 billion. An optional LNG export facility at Gwadar could be added, which would bring the total bill to $2 billion.

The project also aligns with China’s ambitious development plans for the region. China already manages the port at Gwadar, and has an array of projects designed to create an “economic corridor” between Pakistan and western China, connecting the region by rail and road links, and allowing China to import raw materials from around the region.

The historic deal between Iran and the West could accelerate this development by removing a significant hurdle to the Iran-Pakistan pipeline.

By Nick Cunningham, Oilprice.com

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News