Iran–Pakistan gas pipeline

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Iran–Pakistan gas pipeline
Original route of the Iran–Pakistan gas pipeline
Original route of the Iran–Pakistan gas pipeline
Location
Country Iran
Pakistan
From Asalouyeh
Passes through Bandar-Abbas
Iranshahr
Khuzdar
Sui
To Multan
General information
Type Natural gas
Partners National Iranian Oil Company, Sui Northern Gas Pipelines Limited, Sui Southern Gas Company, Gazprom
Expected December 2014[1]
Technical information
Length 2,775 km (1,724 mi)
Maximum discharge 40 billion cubic metres (1.4×10^12 cu ft) per year
Diameter 56 in (1,422 mm)

The Iran–Pakistan gas pipeline, also known as the Peace pipeline,[2] is an under construction pipeline to deliver natural gas from Iran to Pakistan.

History[edit]

Inception[edit]

The idea was conceived by a young Pakistani civil engineer Malik Aftab Ahmed Khan in mid-1950s, when an article of his was published by the Military College of Engineering, Risalpur. The article Persian Pipeline also mentioned the method for its protection along the hostile territory by establishing mini battalion-size cantonments along its proposed route through Baluchistan/Sindh.[3][4] The project was conceptualized in 1989 by Rajendra K. Pachauri in partnership with Ali Shams Ardekani, former Deputy Foreign Minister of Iran. Pachauri proposed the plan to both Iranian and Indian governments in . The government of Iran responded positively to the proposal. At the 2012 annual conference of the International Association of Energy Economics, Ardekani backed Pachauri's proposal.[4]

Timeline[edit]

Discussions between the governments of Iran and Pakistan started in 1994.[5] A preliminary agreement was signed in 1995. This agreement foresaw construction of a pipeline from South Pars gas field to Karachi in Pakistan. Later Iran made a proposal to extend the pipeline from Pakistan into India. In February 1999, a preliminary agreement between Iran and India was signed.[6]

In 2004 the project was revived after the UNDP's report Peace and Prosperity Gas Pipelines by Pakistani petroleum engineer, Gulfaraz Ahmed, was published in December 2003. The report highlighted benefits of the pipeline to Pakistan, India and Iran.[7]

In February 2007, India and Pakistan agreed to pay Iran US$4.93 per million British thermal units (US$4.67/GJ) but some details relating to price adjustment remained open to further negotiation.[8]

In April 2008, Iran expressed interest in the People's Republic of China's participation in the project.[9] In August 2010, Iran invited Bangladesh to join the project.[10]

In 2009, India withdrew from the project over pricing and security issues, and after signing a civilian nuclear deal with the United States in 2008.[11][12] However, in March 2010 India called on Pakistan and Iran for trilateral talks to be held in May 2010 in Tehran.[13]

On 4 September 2012, the project was announced to commence before October 2012 and be completed by December 2014.[14]

On 30 January 2013, the Pakistan's federal government approved a deal with Iran for laying the Pakistan's segment of a pipeline.[15] On 27 February 2013, the construction of the Pakistani section was agreed.[16][17] On 11 March 2013, inauguration of the construction works on the Pakistani section of the pipeline were inaugurated by president of Pakistan Asif Ali Zardari and president of Iran Mahmoud Ahmadinejad.[18][19][20][21] According with Javad Owji, managing director of the National Iranian Gas Company, the pipeline in Pakistan is expected to be constructed in 22 months with the participation of Iran.[22]

On 27 May 2013, Iranian deputy minister for petroleum, A. Khaledi, in a letter to the Pakistan government expressed concern over the delay in the start of the Pakistani portion of the pipeline. He said that after a government-to-government agreement between the two countries, they were supposed to select entities for the construction of the latter part of the pipeline. Pakistan still hasn't officially nominated Tadbir Energy and local sub-contractors to begin work on the Pakistani half of the pipeline.[23]

On 12 June 2013, the newly elected prime minister of Pakistan, Nawaz Sharif, allayed any fears regarding the abandonment of the project and said that the Pakistani government is committed to the fulfillment of the project and targets the first flow of gas from the pipeline in December 2014. The premier also stated that his government is planning to commit to the Turkmenistan-Afghanistan-Pakistan-India gas pipeline project as well.[1]

On 28 November 2013, a 'friendly' country anonymously offers $1 billion to help fund the pipeline. [tribune.com.pk 1]

On 10-November-2013, a meeting between Pakistan Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi and Iranian Minister of Petroleum Bijan Namdar Zangeneh held at the Ministry of Petroleum at Tehran. The Pakistani Officials assured their Iranian counterparts that project would continue despite "external pressure".[24]

On 25-Feb-2014, Minister for Petroleum and Natural Resources Pakistan, Shahid Khaqan Abbasi told the National Assembly that the project for the moment is off the table, he cited international sanctions as the issue, he said " In the absence of international sanctions the project can be completed within three years, but the government cannot take it any further at the moment because international sanctions against Iran are a serious issue". Pakistan will face the penalty if it failed to lay its side of pipeline till December 2014. Analysts however points at Saudi Arabia's pressure to not to carry out the project. [25]

Controversies[edit]

In January 2010, the United States asked Pakistan to abandon the pipeline project. If canceling the project, Pakistan would receive assistance from the United States for construction of a liquefied natural gas terminal and importing electricity from Tajikistan through Afghanistan's Wakhan Corridor.[26] However, on 16 March 2010 in Ankara, Iran and Pakistan signed an agreement on the pipeline.[11] According to the agreement each country must complete its section by 2014.[27] In July 2011, Iran announced that it has completed construction of its section.[28] If Pakistan does not fulfill its obligation to complete the pipeline on its side by the end of 2014, it will have to pay a daily penalty of $1 million to Iran until completion.[29] On 13 March 2012 Pakistan's ministry of finance announced that private investors were showing diminished interest and that the government might have to impose a tax on consumers, or seek government-to-government arrangements with Iran, China and Russia to build the pipeline. On 29 March it was reported that officials from Pakistan's petroleum ministry would travel to Russia in early April for talks with Gazprom.[27] Then, in a 7 April article the Pakistani daily PakTribune reported that Gazprom would both finance and construct the pipeline. This would require setting aside the Public Procurement Regulatory Authority rules which require international bidding for such a large project. The Economic Coordination Committee would be asked in its next meeting to give such permission. The article also informed that the reason the private consortium no longer would contribute to the project was US opposition.[29]

On 15 April 2012, it was reported through unnamed diplomatic sources in Islamabad that Saudi Arabia was offering to deliver an "alternative package" to Pakistan if the country abandoned its cooperation with Iran. In addition to oil the package would also include a cash loan and oil facility. The news came in connection with a visit to Pakistan by the Saudi deputy foreign minister.[30]

On 1 May 2012, it was reported that Pakistan's foreign minister, Hina Rabbani Khar had said that Islamabad will not give in to US pressures to mothball the project and will finish the huge pipeline project "at any cost" and that the project was in line with the country's national interest.[31]

On 29 January 2013, US consul general Michael Dodman threatened Pakistan with economical sanctions if it does not abandon the project.[32]

In late October 2013, Sustainable Policy Development Institute published a report in which the proposed pipeline was termed as "death sentence" for Pakistan. Since the prices in the contract are linked to crude oil prices, the government "blatantly ignored the energy dynamics and its pricing while going for this deal". The gas sold to Pakistan will be higher priced than the current domestic prices of gas in the country.[33]

Route[edit]

The length of the pipeline that will be supplied from the South Pars field has been given variously as 560 miles (900 km),[11] 643 miles (1,035 km),[12] and 2,775 kilometres (1,724 mi).[34] It starts from Asalouyeh and stretches 1,172 kilometres (728 mi) through Iran. The Iranian section is known as Iran's seventh cross-country gas pipeline. The first 902-kilometre (560 mi) part of this section runs from Asalouyeh to Iranshahr. The second 270-kilometre (170 mi) part runs from Iranshahr to the Iran–Pakistan border.[35]

In Pakistan, the length of the pipeline is 785 kilometres (488 mi).[15] It will pass through Baluchistan and Sindh.[11] In Khuzdar, a branch would spur off to Karachi, while the main pipeline will continue towards Multan. From Multan, the pipeline may be expanded to Delhi.[36] The route in Pakistan may be changed if China will participate in the project.[37]

As there are concerns over the pipeline being attacked by Baluchi insurgents, an alternative offshore route from Iran to the maritime boundary between India and Pakistan off Kutch was proposed. According to this proposal, from there one branch was to run to Pakistan while other branch to run to Kutch.[38][39]

Technical description[edit]

The initial capacity of the pipeline was to be 22 billion cubic metres (780 billion cubic feet) of natural gas per year, which was expected to be raised later to 55 billion cubic metres (1.9 trillion cubic feet).[40] However, as a bilateral project between Iran and Pakistan, the pipeline will carry only 8.7 billion cubic metres (310 billion cubic feet) of gas per year as contracted and 40 billion cubic metres (1.4 trillion cubic feet) as a maximum capacity. The pipeline has a diameter of 56 inches (1,400 mm).[41] It is expected to cost US$7.5 billion and to be commissioned by 2013.[5][41]

It is expected that gas delivered from Iran through the pipeline will cost US$11 per million British thermal unit (MMBTU) compared to $13 per MMBTU which is expected to be price of gas delivered through the proposed Trans-Afghanistan Pipeline and $18 per MMBTU of imported LNG.[42]

Companies[edit]

In different times several companies have been interested to build the pipeline. Companies included Gazprom, BHP Billiton, National Iranian Gas Company, Petronas, and Total S.A.. A consortium consisting of Royal Dutch Shell, BG Group, Petronas and an Iranian business group had negotiated on exporting of gas from South Pars to Pakistan. From India, GAIL had been involved.[36] However, the pipeline's section in Iran was built by the National Iranian Gas Company. It used Khatam al-Anbia as a subcontractor.[35] In Pakistan, a consortium of Sui Northern Gas Pipeline Limited and Sui Southern Gas Company Limited is responsible for the construction of the pipeline.[43] The contract for engineering, procurement, construction and financing of the Pakistan's section was signed with Iran's Tadbir Energy. Iran agreed to provide a $500 million loan for construction payable in 20 years.[15] However on 13-December-2013, Pakistan's Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi said that Iran refused to fund the project citing 'acute financial constraint' as the reason. Pakistan authorities however said to remain committed with the project. Both sides have decided to constitute a working group which would re-establish in two months the new parameters for the projects, including a new time-frame and other important issues involving financing of pipeline to be laid down in the territory of Pakistan.[44][45]

See also[edit]

References[edit]

  1. ^ a b Bhutta, Zafar. "Annual plan 2013–14: Govt will not scrap Iran gas pipeline project". The Express Tribune. Retrieved 1 July 2013. 
  2. ^ "The 'peace pipeline'". The National. 28 May 2009. Retrieved 17 April 2013. 
  3. ^ Shahid, Kunwar khuldune (25 November 2011). "Iran-Pakistan gas pipeline traversing history". Pakistan Today. Retrieved 26 November 2011. 
  4. ^ a b ul Haq, Noor (31 July 2010). Iran-Pakistan Peace Pipeline. IPRI Factfile. Islamabad Policy Research Institute. Retrieved 20 November 2011. 
  5. ^ a b "IPI Implementation Nearing 'Final Stage' – Pakistani Official". Downstream Today. Xinhua News Agency. 8 May 2008. Retrieved 10 May 2008. 
  6. ^ Chaudhary, Shamila N. "Iran to India Natural Gas Pipeline: Implications for Conflict Resolution & Regionalism in India, Iran, and Pakistan". School of International Service. Retrieved 20 March 2010. 
  7. ^ "'Iran-Pakistan gas pipeline project is a lifeline for Pakistan's economy,' Dr Gulfaraz Ahmed, Energy Expert". Business Recorder. Retrieved 1 July 2013. 
  8. ^ "Peace Pipeline Contract Soon, Gas Flow by 2011". Iran Daily. 1 July 2007. Archived from the original on 6 May 2008. Retrieved 10 May 2008. 
  9. ^ "Ahmadinehjad Would Welcome Chinese Role in Gas Pipeline". Downstream Today. Xinhua News Agency. 28 April 2008. Retrieved 10 May 2008. 
  10. ^ Kabir, Humayan (15 August 2010). "Iran invites Bangladesh to join cross-border gas grid". The Financial Express. Retrieved 20 November 2011. 
  11. ^ a b c d Haider, Zeeshan (17 March 2010). "Pakistan, Iran sign deal on natural gas pipeline". Reuters. Retrieved 20 March 2010. 
  12. ^ a b "Pakistan gas pipeline is Iran's lifeline". UPI. 19 March 2010. Retrieved 20 March 2010. 
  13. ^ "New Delhi calls for IPI talks". UPI. 19 March 2010. Retrieved 20 March 2010. 
  14. ^ "Iranian gas will start flowing from December 2014: Dr Asim Hussain". The Express Tribune. 4 September 2012. Retrieved 4 September 2012. 
  15. ^ a b c "Pakistan Ratifies Iran-Pakistan Pipeline Agreement". 31 January 2013. Retrieved 2 February 2013. 
  16. ^ "Pakistan Ratifies Iran-Pakistan Pipeline Agreement". 27 February 2013. Retrieved 28 February 2013. 
  17. ^ "Pakistan, Iran agree to complete gas pipeline in 15 months". 28 February 2013. Retrieved 28 February 2013. 
  18. ^ "Iran, Pakistan inaugurate IP gas pipeline". Press TV. 12 March 2013. Retrieved 20 March 2013. 
  19. ^ "Pakistan-Iran gas pipeline defies US". BBC News. 11 March 2013. Retrieved 11 March 2013. 
  20. ^ "Zardari, Ahmedinijad inaugurate Pak-Iran gas pipeline project". The Nation. 11 March 2013. Retrieved 11 March 2013. 
  21. ^ "Pakistan-Iran gas pipeline inaugurated defying US opposition". Euronews. 11 March 2013. Retrieved 11 March 2013. 
  22. ^ "Iran to complete gas line to Pakistan in 22 months: Official". 27 February 2013. Retrieved 28 February 2013. 
  23. ^ Bhutta, Zafar. "Iran upset about slow progress on gas pipeline". The Express Tribune. Retrieved 1 July 2013. 
  24. ^ http://www.dawn.com/news/1061696/pakistan-to-push-forward-gas-project-with-iran
  25. ^ http://www.dawn.com/news/1089254/iran-gas-project-off-the-table-minister
  26. ^ "US asks Pak to pull out of Iran gas pipeline project to qualify for extensive assistance". Thaindian News. ANI. 14 January 2010. Retrieved 20 March 2010. 
  27. ^ a b Anwar, Haris (29 March 2012). "Pakistan Seeks Russia's Help to Finance Iran Gas Pipeline". Bloomberg News. Retrieved 16 April 2012. 
  28. ^ Javaid, Zeeshan (14 November 2011). "Pakistan to renegotiate price formula with Iran". Daily Times. Retrieved 20 November 2011. 
  29. ^ a b "Russia to help Pakistan build IP gas pipeline". PakTribune. 7 April 2012. Retrieved 16 April 2012. 
  30. ^ "Iran gas pipeline: Saudi offer". Dawn. 15 April 2012. Retrieved 16 April 2012. 
  31. ^ "Pakistan not to give in to US pressure on IP pipeline project". Press TV. 1 May 2012. Retrieved 2 May 2012. 
  32. ^ "US warns Pakistan of sanctions over Iran gas pipeline deal". 29 January 2013. Retrieved 29 January 2013. 
  33. ^ http://sdpi.org/publications/files/IP-Report.pdf
  34. ^ "India has quit Iran gas pipeline deal". Agence India Press. 6 September 2009. Retrieved 2 May 2012. 
  35. ^ a b "Khatam-ol-Anbia to build 2nd phase of IPI gas pipe". Mehr News Agency. 10 August 2010. Retrieved 20 November 2011. [dead link]
  36. ^ a b Shahid, Sohaib (15 January 2007). "Iran-Pak-India gas pipeline: implications and prospects". Business & Finance Review (Jang Group of Newspapers). Retrieved 20 March 2010. 
  37. ^ "Pakistan determined to launch IP Pipeline". Iran Daily (Zawya). 17 November 2011. (subscription required). Retrieved 20 November 2011. 
  38. ^ Swaminathan S. Anklesaria Aiyar (28 December 2008). "IPI gas pipeline, RIP". The Times of India. Retrieved 20 March 2010. 
  39. ^ Syed Fazl-e-Haider (20 November 2011). "Murky politics of gas". dawn.com. Retrieved 20 November 2011. 
  40. ^ Bappa Majumdar, Nidhi Verma (29 April 2008). "Iranian president tries to seal India pipeline". Reuters. Retrieved 10 May 2008. 
  41. ^ a b "Iran: No security snag in pipeline deal". Tehran Times. 7 November 2011. Retrieved 20 November 2011. 
  42. ^ Abdul Rasheed Azad (5 April 2012). "IP pipeline project: Pakistan to pay $6/MMBTU more for gas price". Business Recorder. Retrieved 20 March 2013. 
  43. ^ Javaid, Zeeshan (17 March 2010). "IP pipeline project to cost $3-4bn". Daily Times. Retrieved 20 March 2010. 
  44. ^ http://www.platts.com/latest-news/natural-gas/karachi/iran-withdraws-500-mil-funding-offer-to-pakistan-26546608
  45. ^ http://tribune.com.pk/story/644785/in-limbo-iran-takes-back-pipeline-financing-deal/

External links[edit]