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Global Energy Advisory – 17th April 2015

The Geopolitics of Oil

The Iran-Pakistan Pipeline

The Iran-Pakistan pipeline, which has been languishing on the Pakistani side, looks set to get a boost from China, which has apparently agreed to take on the $2 billion Pakistani pipeline segment. If this deal goes through, the Pakistani segment of the pipeline, which is 485 miles, would be funded largely by a Chinese loan and construction would be undertaken by China’s CNPC. Iran has already completed its 560-mile segment of the pipeline. Pakistanis say the deal with China is expected to be signed during a presidential visit to Islamabad this month. That this pipeline is now going ahead, after many delays, speaks volumes about Pakistan’s stance in the latest geopolitical quagmire in the Middle East.

About this time last year, the Saudis “donated” $1.5 billion to Pakistan. The US had long been trying to thwart the Iran-Pakistan pipeline—a $7.5-billion gas pipeline that would feed Iranian gas to desperate Pakistan, which suffers from severe energy shortages and whose economy is crippled at best. This pipeline is of immense importance to Pakistan and to the country’s overall stability. The US was not successful in convincing or blackmailing Pakistan into foregoing the project, and this is where Saudi money came into play. The US needed Pakistan’s help on the Afghan border. The $1.5 billion was a bribe. Right after the “donation” was issued in March 2014,…




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