• 2 days Shell Oil Trading Head Steps Down After 29 Years
  • 2 days Higher Oil Prices Reduce North American Oil Bankruptcies
  • 2 days Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 2 days $1.6 Billion Canadian-US Hydropower Project Approved
  • 3 days Venezuela Officially In Default
  • 3 days Iran Prepares To Export LNG To Boost Trade Relations
  • 3 days Keystone Pipeline Leaks 5,000 Barrels Into Farmland
  • 3 days Saudi Oil Minister: Markets Will Not Rebalance By March
  • 3 days Obscure Dutch Firm Wins Venezuelan Oil Block As Debt Tensions Mount
  • 3 days Rosneft Announces Completion Of World’s Longest Well
  • 3 days Ecuador Won’t Ask Exemption From OPEC Oil Production Cuts
  • 4 days Norway’s $1 Trillion Wealth Fund Proposes To Ditch Oil Stocks
  • 4 days Ecuador Seeks To Clear Schlumberger Debt By End-November
  • 4 days Santos Admits It Rejected $7.2B Takeover Bid
  • 4 days U.S. Senate Panel Votes To Open Alaskan Refuge To Drilling
  • 4 days Africa’s Richest Woman Fired From Sonangol
  • 4 days Oil And Gas M&A Deal Appetite Highest Since 2013
  • 4 days Russian Hackers Target British Energy Industry
  • 5 days Venezuela Signs $3.15B Debt Restructuring Deal With Russia
  • 5 days DOJ: Protestors Interfering With Pipeline Construction Will Be Prosecuted
  • 5 days Lower Oil Prices Benefit European Refiners
  • 5 days World’s Biggest Private Equity Firm Raises $1 Billion To Invest In Oil
  • 5 days Oil Prices Tank After API Reports Strong Build In Crude Inventories
  • 5 days Iraq Oil Revenue Not Enough For Sustainable Development
  • 6 days Sudan In Talks With Foreign Oil Firms To Boost Crude Production
  • 6 days Shell: Four Oil Platforms Shut In Gulf Of Mexico After Fire
  • 6 days OPEC To Recruit New Members To Fight Market Imbalance
  • 6 days Green Groups Want Norway’s Arctic Oil Drilling Licenses Canceled
  • 6 days Venezuelan Oil Output Drops To Lowest In 28 Years
  • 6 days Shale Production Rises By 80,000 BPD In Latest EIA Forecasts
  • 6 days GE Considers Selling Baker Hughes Assets
  • 6 days Eni To Address Barents Sea Regulatory Breaches By Dec 11
  • 6 days Saudi Aramco To Invest $300 Billion In Upstream Projects
  • 7 days Aramco To List Shares In Hong Kong ‘For Sure’
  • 7 days BP CEO Sees Venezuela As Oil’s Wildcard
  • 7 days Iran Denies Involvement In Bahrain Oil Pipeline Blast
  • 9 days The Oil Rig Drilling 10 Miles Under The Sea
  • 9 days Baghdad Agrees To Ship Kirkuk Oil To Iran
  • 9 days Another Group Joins Niger Delta Avengers’ Ceasefire Boycott
  • 9 days Italy Looks To Phase Out Coal-Fired Electricity By 2025
John Daly

John Daly

Dr. John C.K. Daly is the chief analyst for Oilprice.com, Dr. Daly received his Ph.D. in 1986 from the School of Slavonic and East European…

More Info

Iran-Pakistan Natural Gas Pipeline to Extend to China?

Iran-Pakistan Natural Gas Pipeline to Extend to China?

The energy relations between Iran and Pakistan are a marriage made in heaven, except for international politics.

Pakistan’s current energy deficit problems are severe and increasing. Pakistan’s most respected English-language newspaper, “Dawn,” recently headlined an article, “Pakistan, Nuclear-armed but short of electricity” before noting, “Power can be out for up to 20 hours a day in the summer… The shortfalls that became the no. 1 issue in the recent election are estimated at 3,500 to 6,000 megawatts, up to a third of total demand.”

Pakistan’s ramshackle and investment starved private power companies have roughly 50 percent less electricity generation capability than the actual demand, leaving Pakistan’s National Grid facing more than a 5,000-megawatt shortfall in power generation, leading to blackouts (referred to in the Pakistani press as “load shedding”) in both urban and rural areas of the country.

Combined with rampant theft of electricity and massive corruption in the country’s power sector, Pakistan’s ongoing energy shortages are unlikely to end anytime soon, whatever Islamabad does. The country’s crisis peaked on 24 February, when a fault at one power station cascaded into multiple plant shutdowns and plunged the entire nation into darkness, with authorities warning that the power crisis would deepen as the summer approached. In June, “load shedding” led to blackouts of up to 18 hours in urban areas and up to 22 hours of outage in rural areas. Pakistan currently produces roughly 11,000 megawatts of electricity, but the country needs more than 17,000 megawatts of power to meet the rising demand of a growing population.

Related article: Canada's LNG Dream – Racing Ahead…at a Snail's Pace

So, where to make up the electricity shortfall, short and long term?

Foreign investment, but here, Pakistani nationalism has hardly improved the situation.

Just a couple of months ago, the newly-elected government of Prime Minister Nawaz Sharif declared that it would leave no stone unturned to improve relations with India, which was reciprocated by New Delhi when an expert group of Indian Power Ministry led by Joint Secretary Rita Acharya visited Pakistan in June and offered building a series of high power voltage lines to transmit 500 megawatts of electricity to Pakistan, but conservative elements in the Pakistan’s Foreign Office apparently torpedoed the plan, leading a major Pakistani energy mogul to declare, “History will never forgive and spare those evil elements who have done such a huge disservice to the motherland by succeeding in having this project discarded. They’ll be exposed and become an example of horror for the entire mankind. You just wait here and see how the truth would take its course to expose the extremist mindset in our security ranks. This is an unpardonable crime that would never be forgiven.”

Enter China, increasingly the world’s fiscal investment savior and Iran, seeking to circumvent increasingly stringent foreign sanctions imposed on the country for its purported cover nuclear weapons program.

Despite Washington’s displeasure, Pakistan has been engaged in discussion with Iran to construct a $7.5 billion “Peace Pipeline” to deliver 21.5 million cubic meters of natural gas a day to Pakistan from Iran’s massive offshore Persian Gulf South Pars field, currently being developed in conjunction with Qatar.

In March U.S. State Department spokesman Victoria Nuland, in response to a question about the pipeline, stated that “We have serious concerns if this project actually goes forward that the Iran Sanctions Act would be triggered.”

Related article: The Battle for Balcombe

But China’s possible entry to the pipeline project moves the diplomatic chess game to a new level, as Beijing is interested in participating in the extension of the proposed Iran-Pakistan natural gas pipeline to China.

Building on China’s development of Pakistan’s Arabian Sea Gwadar port, Pakistani and Chinese officials on 26 August meeting in Islamabad will discuss building a natural gas pipeline from Gwadar to western China, along with possibly constructing an oil pipeline between the two nations. During the meeting the two countries will sign a memorandum of understanding on the economic corridor, which has already been approved by Pakistan’s cabinet in the wake of Prime Minister Nawaz Sharif's visit to China in July.

The talks put Washington between sanctions and a hard place. Browbeating Islamabad by threatening sanctions while dropping drone strikes on the country is one thing, interfering with Chinese energy policies quite another. While predicting Washington’s future policy is a fool’s game, the advent of Beijing into the “Peace Pipeline” complicates Washington’s options at the very least.

By. John C.K. Daly of Oilprice.com




Back to homepage


Leave a comment

Leave a comment




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