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 for cheap energy and its public would never accept US interference in this project. Here’s where the interference will be, though: In Balochistan, the US and Saudi Arabia are funding Sunni jihadists (Jundallah) to destabilize Balochistan (and in the process, dangerously, Pakistan). This destabilization tactic extends to Iran’s Baloch province. We can expect some significant sabotage of this pipeline, which will be blamed on Sunni militants. Almost 665km of the pipeline will pass through Balochistan. Some 115km will run through Sindh province.
This pipeline finds its origins in the Iran-Pakistan-India (IPI) pipeline, until India dropped out in 2009 under pressure from Washington. Or, rather, Washington bribed India to drop the project by offering it cooperation in civil nuclear energy. At the time, it was often referred to as the “Peace Pipeline”—a meaningful nickname given the unprecedented cooperation between India and Pakistan on the issue. The US interference in this pipeline plan has led to an increase in tensions between Pakistan and India. India now has been flipped; once promoting the pipeline vehemently, now calling it a risky venture. Iran is also very concerned about the situation in Balochistan and faces opposition to the pipeline at home due to the threat to its security posed by the Jundallah. Balochistan will become a key energy security flashpoint in 2013 if IP construction begins on schedule in January. The province will become a cornerstone of the region’s natural resource wealth and a strategic link to landlocked Afghanistan and Central Asia (something India is eyeing as well). The US is keen to control Balochistan, because this will be the frontline of transit for if the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline ever gets off the ground. Right now, Iran and Pakistan simply do not have enough control over this area to make the IP pipeline work.