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Iran-Pakistan: Western Pipeline Nightmare

Incident: The National Iranian Gas Company has announced it will begin construction of the Iran-Pakistan (IP) pipeline within 30 days. Construction will start on the Pakistani side with the first 700 kilometers that will run to the Iranian border. Iran will then build 300 kilometers of the IP pipeline on its territory, to connect up with the Pakistani border. Starting in 2014, the pipeline will transport 2.15 million cubic meters of gas per day to Pakistan. Iranian banks are assisting Pakistan with its portion of the pipeline financing with some $750 million in loans and equipment.

Bottom Line: Pakistan needs this pipeline desperately, and Iran is intent on seeing it go through—to the extent of ensuring the financing of the bulk of the project. The West is equally determined to sabotage it. The fact that the pipeline runs through some extremely insecure territory in Balochistan will make its success questionable and this is likely to become the new frontline in the pipeline wars for 2013.

Analysis: This pipeline is a necessity especially for Pakistan, but it won’t go down without some major challenges. The pipeline will run through some tough territory—Pakistan’s south-western province of Balochistan, which borders Afghanistan and Iran’s own restive Balochistan province. The US and Saudi Arabia have fought tooth and nail to get Pakistan to give up on the pipeline project with Iran. But this is a losing battle. Pakistan is starved…

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