• 2 minutes Oil Price Could Fall To $30 If Global Deal Not Extended
  • 5 minutes Middle East on brink: Oil tankers attacked off Oman
  • 8 minutes CNN:America's oil boom will break more records this year. OPEC is stuck in retreat
  • 11 mins Iran downs US drone. No military response . . Just Destroy their Economy Completely. Can Senator Kerry be tried for aiding enemy ?
  • 11 mins Emissions Need To Be Halved To Avoid 3C Warming
  • 2 hours The Pope: "Climate change ... doomsday predictions can no longer be met with irony or disdain."
  • 48 mins Here We Go: New York Lawmakers Pass Aggressive Law To Fight Climate Change
  • 30 mins Coal Boom in Asia is Real and a Long Trend
  • 6 hours Summit in Pyongyang: China's Xi Says World Hopes North Korea-U.S. Talks Can Succeed
  • 7 hours Pioneer CEO Said U.S. Oil Production would be up to 15 mm bbls/day NOW if we had the pipelines. Permian pipelines STARTING Q3
  • 16 hours Solar Panels at 26 cents per watt
  • 2 hours Huge UK Gas Discovery
  • 21 hours The Magic and Wonders of US Shale Supply: Keeping energy price shock minimised: US oil supply keeping lid on prices despite global risks: IEA chief
  • 21 hours Magic of Shale: EXPORTS!! Crude Exporters Navigate Gulf Coast Terminal Constraints
  • 21 hours US to become net oil exporter in November: EIA
  • 19 hours US Shale Drilling lacks regulatory body.
  • 20 hours Ireland To Ban New Petrol And Diesel Vehicles From 2030
Alt Text

America’s Most Important Natural Gas Export Market

Trump’s plans to impose tariffs…

Alt Text

Russia Pushes Back Against “Freedom Gas”

The global gas market has…

Alt Text

A Watershed Moment For Gazprom

The Kremlin’s push for reform…

Juan Cole

Juan Cole

Juan runs the popular geopolitics blog Informed Comment where he provides an independent and informed perspective on Middle Eastern and American politics.

More Info

Trending Discussions

The US Looks on as Pakistan and Iran Inaugurate Gas Pipeline

Iran’s president Mahmoud Ahmadinejad and Pakistani president Asaf Ali Zardari on Monday inaugurated a gas pipeline that will supply Pakistani cities with Iranian natural gas. The pipeline has been largely completed on the Iranian side, but Pakistan had problems getting the international financing to complete its leg, which will cost $1.5 billion. Iran is loaning Pakistan $500 million, and Pakistan is putting up the other billion from its own resources. They plan to complete the project by the end of 2014.

The United States has threatened unilateral third-party sanctions against companies and countries initiating big economic enterprises with Iran. The Pakistani stock market lost a few points on fears that the US Department of the Treasury will come after Pakistan for its defiance.

Pakistan, a country of 180 million, is the sixth largest in the world and it faces a severe energy crisis. It has few hydrocarbons of its own. It has enormous potential for solar and wind, but has not developed alternative energy sources– and lacks both the investment capital and the know-how to make quick strides in that area. The energy crisis is so bad that major urban populations suffer with frequent electricity outages (try running a factory that way) and brown-outs. In the punishing summers, the brown-outs or ‘load shedding’ can be deadly to certain populations, including the elderly and infirm. There have actually been electricity riots in large cities such as Lahore.

Related article: Keystone XL a Bullet Compared With Other Pipelines

The original plan for the pipeline had an Indian leg. Whether India will in fact join in is now in doubt. But Iran may calculate that energy-hungry India won’t be able to resist hooking into the pipeline once it reaches Lahore, only 60 miles from the Indian border. Because severe US sanctions on Iran are just made up by the US congress and the Department of the Treasury and have little international backing, it is likely that they will increasingly be defied by an energy-hungry world– I.e. Pakistan’s defection on this issue, and China’s refusal to cooperate, are probably bellwethers for other countries not deeply beholden in some way to the US.

Iran Pakistan Pipeline

That Pakistan needs the gas, and can’t get it on such favorable terms elsewhere, is inarguable. But the two countries are calling the pipeline the ‘Peace Pipeline’ and it seems likely that the Zardari government is seeking it in part in hopes of improving relations with Iran at a time when America is disentangling itself from the region. Pakistan may want Iran’s help with stabilizing Afghanistan as the US leaves, and may want to avoid an India-Iran (Shiite-Hindu) alliance against (Sunni) Pakistan.

Zardari’s Pakistan People’s Party is facing elections soon, and he may want to signal his independence from the US, which is extremely unpopular in Pakistan, in part because of its drone strikes and violation of Pakistani sovereignty. It is also possible that the civilians around Zardari are attempting to firm up relations with Iran as a way of offsetting the alliance of some hard liners in the officer corps with Saudi Arabia and with elements of the Taliban.

Related article: Pakistan Thumbs Nose at U.S. on Energy

Euronews reports:

The USG Open Source Center translates an interview on the issues around the pipeline by Ikram Sehgal (former military officer and now head of a private security firm), appearing on the Geo TV satellite station in Urdu:

“(Begin live relay) (Unidentified anchor) The Iran-Pak (IP) gas pipeline project has been formally inaugurated by the presidents of Pakistan and Iran. We have been joined by analyst Ikram Sehgal to discuss the project. Sehgal, do you think the project will help Pakistan overcome the energy shortage?

(Sehgal) It is a major as well as positive development because Pakistan is an //energy-starved// country. Due to the shortage of energy, our factories were getting closed and services were being suspended. Unemployment and price-hike were increasing, which could lead to eruption of anarchy in the country. I had been a critic to this government but it is their //very brave// and //courageous// decision. It was also necessary. Also, Iran is our good neighbor. We have got the gas at good rate. It is necessary that the project has positive effects on other areas as well. Obviously, the United States is not happy with it, but we will have to convince it that we direly needed the project for being an energy-deficient country. India imports oil from Iran but there are no sanctions against it. The United States has also signed energy pact with India, under which the later can import nuclear equipment from several countries. The United States must realize that if anarchic situation develops in Pakistan and peace and stability is disturbed within the country, it will have effect on the region. Hence, the United States should take long-term view of the project.

(Unidentified anchor) Sehgal, do you think the upcoming government would also be able to bear the US pressure on the project?

(Sehgal) Since the entire nation is united on the project, there would be no issue for the coming government. Also, the next government will not have to face such level of pressure. The incumbent government should be lauded for initiating the project. (end of live relay)”

By. Professor Juan Cole

Download The Free Oilprice App Today

Back to homepage

Trending Discussions

Leave a comment
  • Martin H. Katchen on March 13 2013 said:
    What the US may do about this pipeline and what Saudi Arabia may do about this pipeline may be two different things. For the US, Pakistani cooperation with Iran is a matter of loss of international prestige--a serious matter, given that Pakistan is drawing close to China at US expense, but not a matter that the US is likely to take overt or covert action about.
    For Saudi Arabia, this ppeline amounts to a gain in power by a Shiite landholding elite in Pakistan and is something to be resisted by any means possible. The Saudis have been counting on Pakistan as a Sunni state that will guarantee Saudi Arabia's military security if the US turns out to be unreliable. In fact, Saudi Arabia has been counting on Pakistan selling Saudi Arabia some of it's nuclear weapons in the event Iran dose not get rud of it's nuclear capability. Now all of that is in doubt.
    So Saudi Arabia can be expected to redouble it's effort in support of the Pakistani Taleban and toward a Salafist state in Pakistan as it tries at least to prevent the pipeline from being finished. just as it is supporting a Salafist Sunni state in Syria. This does not bode well for stability in either Afghanistan or Pakistan.
  • Irfan Alam on March 14 2013 said:
    Pakistan and Iran are bound for bigger things, or shall I say, destined for them, due to their strategic location, which Saudi Arabia, certainly isn't. Pakistan can afford to be friends with Saudi Arabia, or even US, insofar as the friendship is reciprocated. Any other arrangement, is bound to fail, as we see it happening in Afghanistan. friendship can't be a one way street, even among nations, as any nation is free to choose options suited to its interest, more than any one else. If Saudis persist in clinging to US coat tails for security, then its their destined misery, but if they expect a similar arrangement from Pakistan, just because they feel its right, then it might asking for too much.

Leave a comment

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