Iran will sign a gas deal with Pakistan even if India - the third party to the IPI pipeline project - walks out, Iranian Oil Minister Gholamhossein Nozari has been quoted by an Iranian news agency as saying. Nozari's remarks come against the backdrop of arrival in Tehran of a Pakistani delegation for two-day talks on the issue.
The pipeline project has suffered lengthy delays, largely due either to differences over tariff or because of endless foot-dragging by India, apparently under pressure from the US not to sign any such pact with Iran. (India has since been rewarded by the US with a civilian nuclear pact.) A second factor in India's dilly-dallying has been its ingrained wish to block any benefit, financial or otherwise, from accruing to the energy-starved Pakistan. It will be recalled that India had stayed away from the pipeline talks held in Tehran in September this year on the plea that it wished to settle the transit fee issue with Pakistan on a bilateral basis first, which was clearly an attempt to further delay the project.
According to available details, the IPI pipeline would initially carry 60 million cubic meters of gas daily to Pakistan and India, to be equally divided among them. The pipeline's capacity would be later increased to 150 million cubic meters. Iran says it has completed 18 percent of the work for the pipeline to bring gas from its South Pars gas-field to Pak-Iran border, while Pakistan has yet to initiate work on the 1,000-km stretch to link Iran with India.
The project has been kept in the limbo of procrastination by India for so long that Iran has finally signalled its readiness to go ahead without India's participation, which we believe is a propitious development because it will obviate any chance of India playing its old obstructionist tricks. The estimated cost of the mega project has meanwhile escalated to $7.5 billion, which will be an additional burden to be shared by the contracting parties. Originally conceived as the Iran-Pakistan project way back in 1993, the pipeline was later proposed to be extended to India, which has since become the main stumbling block in progress of the pipeline.
The initial capacity of the pipeline will be 22 billion cubic meters of natural gas per annum, which is expected to be increased later to 55 billion cubic meters. As per the original timeframe, starting in 2009 the project was scheduled to be completed by 2012. But now with India practically out of the loop if Iran goes ahead with its resolve, the completion date of the project too will have to be considerably extended. The euphoria the project had initially generated in the region can be gauged from the fact that it was dubbed by many as a "peace pipeline" because it would have created shared stakes in maintaining peace in the region, which would have helped ease tensions.
Natural gas has meanwhile come to play a critical role in the region's industrial sector, as most of the industries which were previously using fuel oil have gradually converted to natural gas. In Pakistan the major consumers of gas now include cement, power and fertiliser industries, which are the key sectors of the economy. The widening industrial application of gas and its growing availability crunch in Pakistan has made it absolutely essential for the government not only to undertake new gas exploration projects, but also to popularise gas conservation methodologies in the country.
If Iran finally goes ahead with the pipeline project without India's participation, and if India decides at some future date to join the project, Pakistan will obviously be the common denominator, which will put it in a dominant position. From Pakistan's perspective, the pipeline project has vital significance because apart from helping it meet its own energy requirements it will bring in handsome financial dividends in the shape of annual royalty.
However, India is said to have reservations over the project because of the security situation in Balochistan through which it will pass. (Incidentally, the plan to lay Turkmenistan-Afghanistan-Pakistan (TAP) pipeline too could not materialise because of the tenuous security situation in Afghanistan.) As one analyst has put it, Iran, being South Asia's immediate neighbour, has an edge in terms of natural gas reserves, while Pakistan is ideally located to benefit from these reserves. As India has become a major obstacle in implementation of the IPI project, Pakistan should team up with Iran to complete the Iran-Pakistan segment on a priority basis. This will help Pakistan meet its immediate energy requirements.
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