Iran has the world's largest natural gas field. Many countries and especially Pakistan, India, and China, want and need that fuel. The demand for it is intense.
The United Sates has kept Iran's natural gas bottled up for decades. Now the pressure to release the gas has buit up so much that the US bottling-up strategy is ffailing, and that failure will have world-wide consequences.
The key escape route for Iran's gas is the Iran-Pakistan Pipeline, to which Pakistn has jusst agreed, against all the pressure the United States can mount.
On March 28,2013, The Guardian reported that Iran and Pakistan signed an agreement to construct a pipeline, the IP Pipeline, from Iran's Pars natural gas field to Islamabad. Construction is to be completed in 2014.
Iran's President Mahmoud Ahmadinejad
and Pakistan President Asia Ali Zardari,
as the gas pipeline project is launched.
The PI Pipeline, if completed, will end the American and Western hegemonic control Central Asia and the bitter Sunni-Shia internacene warfare which has blocked Muslim cooperation for a long time. It will also end the Western-imposed sanctions on Iran, and make Iran an important player on the World Stage.
Views on the consequences of the Pipeline are collected in news articles reprinted aafter the jump. They do not all agree. The US press is laargely and curiously silent.
We'll know more aafter the Pakistan presidential election on Maya 11, 2013.
Here's the view from Moscow:
RT , the Russian national news outlet, is a reputable news source with an anti-US slant. Comments in pruple are by me.
Iran, Pakistan, Syria, Qatar: Pipelineistan at work
Iranians work on a section of a pipeline linking Iran and Pakistan after the project was launched during a ceremony in the Iranian border city of Chah Bahar on March 11, 2013. (AFP Photo / Atta Kenare)
Construction is nearing completion on a natural gas pipeline linking Iran and Pakistan, a project that portends a huge geopolitical shift. As regional powers strengthen ties in this key energy market, they're looking to China, and away from the West.
Since the early 2000s, analysts and diplomats across Asia have been dreaming of a future Asian Energy Security Grid.
This – among other developments – is what it’s all about, the conclusion of the final stretch of the $7.5 billion, 1,100-mile natural gas Iran-Pakistan (IP) pipeline, starting from Iran’s giant South Pars field in the Persian Gulf, and expected to be online by the end of 2014.
Nobody lost money betting on Washington’s reaction; IP would put Islamabad in “violation of United Nations sanctions over [Iran’s] nuclear program.” Yet this has nothing to do with the UN, but with US sanctions made up by Congress and the Treasury Department.
Sanctions? What sanctions? Islamabad badly needs energy. China badly needs energy. And India will be extremely tempted to follow, especially when IP reaches Lahore, which is only 100 km from the Indian border. India, by the way, already imports Iranian oil and is not sanctioned for it.
All aboard the win-win train
When Iranian President Mahmoud Ahmadinejad and Pakistani President Asif Zardari met at the Iranian port of Chabahar in early March, that was a long way after IP was first considered in 1994 – then as Iran-Pakistan-India (IPI), also known as the 'peace pipeline.' Subsequent pressure by both Bush administrations was so overwhelming that India abandoned the idea in 2009.
IP is what the Chinese call a win-win deal. The Iranian stretch is already finished. Aware of Islamabad’s immense cash flow problems, Tehran is loaning it $500 million, and Islamabad will come up with $1 billion to finish the Pakistani section. It’s enlightening to note that Tehran only agreed to the loan after Islamabad certified it won’t back out (unlike India) under Washington pressure.
IP, as a key umbilical (steel) cord, makes a mockery of the artificial – US-encouraged – Sunni-Shia divide. [This is a curious comment. It is true that Pakistan is mostly Sunni and Iran is mostly Shia but I know of no evidence of US encouragement of a division. See Vali Nasr, The Shia Revival, for the 1,600 year history of bitter antagonism between the rival Muslim groups.] Tehran needs the windfall, and the enhanced influence in South Asia. Ahmadinejad even cracked that “with natural gas, you cannot make atomic bombs.”
Zardari, for his part, boosted his profile ahead of Pakistan’s elections on May 11. With IP pumping 750 million cubic feet of natural gas into the Pakistani economy everyday, power cuts will fade, and factories won’t close. Pakistan has no oil. It may have huge potential for solar and wind energy, but no investment capital and knowhow to develop them.
Politically, snubbing Washington is a certified hit all across Pakistan, especially after the territorial invasion linked to the 2011 targeted assassination of Bin Laden, plus Obama and the CIA’s non-stop drone wars in the tribal areas.
Moreover, Islamabad will need close cooperation with Tehran to assert a measure of control of Afghanistan after 2014. Otherwise an India-Iran alliance will be in the driver’s seat.
Washington’s suggestion of a Plan B [discussed in another article, below] amounted to vague promises to help building hydroelectric dams; and yet another push for that ultimate 'Pipelineistan' desert mirage – the which has existed only on paper since the Bill Clinton era.
The Foreign Office in Islamabad argued for Washington to at least try to show some understanding. As for the lively Pakistani press, it is having none of it.
This photograph taken on February 12, 2013 shows the construction site at Gwadar port in the Arabian Sea. (AFP Photo / Behram Baloch)
The big winner is… China
IP is already a star protagonist of the New Silk Road(s) – the real thing, not a figment of Hillary Clinton’s imagination. And then there’s the ultra-juicy, strategic Gwadar question.
Islamabad decided not only to hand over operational control of the Arabian Sea port of Gwadar, in ultra-sensitive southwest Balochistan, to China; crucially, Islamabad and Beijing also signed a deal to build a $4 billion, 400,000 barrels-a-day oil refinery, the largest in Pakistan.
Gwadar, a deepwater port, was built by China, but until recently, the port's administration was Singaporean.
The long-term Chinese master plan is a beauty. The next step after the oil refinery would be to lay out an oil pipeline from Gwadar to Xinjiang, parallel to the Karakoram highway, thus configuring Gwadar as a key Pipelineistan node distributing Persian Gulf oil and gas to Western China – and finally escaping Beijing’s Hormuz dilemma.
Gwadar, strategically located at the confluence of Southwest and South Asia, with Central Asia not that far, is bound to finally emerge as an oil and gas hub and petrochemical center – with Pakistan as a crucial energy corridor linking Iran with China. All that, of course, assuming that the CIA does not set Balochistan on fire.
The inevitable short-term result anyway is that Washington’s sanctions obsession is about to be put to rest at the bottom of the Arabian Sea, not far from Osama bin Laden’s corpse. And with IP probably becoming IPC – with the addition of China – India may even wake up, smell the gas, and try to revive the initial IPI idea.
The Syrian Pipelineistan angle
This graphic Iranian success in South Asia contrasts with its predicament in Southwest Asia.
The South Pars gas fields – the largest in the world – are shared by Iran and Qatar. Tehran and Doha have developed an extremely tricky relationship, mixing cooperation and hardcore competition.
The key (unstated) reason for Qatar to be so obsessed by regime change in Syria is to kill the $10 billion Iran-Iraq-Syria pipeline, which was agreed upon in July 2011. The same applies to Turkey, because this pipeline would bypass Ankara, which always bills itself as the key energy crossroads between East and West.
(AFP Photo / Atta Kenare)
It’s crucial to remember that the Iran-Iraq-Syria pipeline is as anathema to Washington as IP. The difference is that Washington in this case can count on its allies Qatar and Turkey to sabotage the whole deal.
This means sabotaging not only Iran but also the 'Four Seas' strategy announced by Syrian President Bashar al-Assad in 2009, according to which Damascus should become a Pipelineistan hub connected to the Caspian Sea, the Black Sea, the Persian Gulf and the Eastern Mediterranean.
The strategy spells out a Syria intimately connected with Iranian – and not Qatari – energy flows. Iran-Iraq-Syria is known in the region as the 'friendship pipeline.' Typically, Western corporate media derides it as an 'Islamic' pipeline. (So Saudi pipelines are what, Catholic?) What makes it even more ridiculous is that gas in this pipeline would flow to Syria and then Lebanon – and from there to energy-starved European markets close by.
The Pipelineistan games get even more complicated when we add the messy Iraqi Kurdistan/Turkey energy love affair – detailed here by Erimtan Can – and the recent gas discoveries in the Eastern Mediterranean involving territorial waters of Israel, Palestine, Cyprus, Egypt, Lebanon and Syria; some, or perhaps all of these actors could turn from energy importers to energy exporters.
Israel will have a clear option to send its gas via a pipeline to Turkey, and then export it to Europe; that goes a long way to explain the recent phone call schmoozing between Turkey’s Prime Minister Erdogan and Israel’s Netanyahu, brokered by Obama.
Terrestrial and maritime borders between Israel and Lebanon remain dependent on a hazy UN Blue Line, set up way back in 2000. Damascus – as well as Tehran – supports Beirut, once again against Washington’s will. And Damascus also supports Baghdad’s strategy of diversifying its means of distribution, once again trying to escape the Strait of Hormuz. Thus, the importance of the Iran-Iraq-Syria pipeline.
No wonder Syria is a red line for Tehran. Now the whole of Pipelineistan will be watching how far Qatar is willing to go following Washington's obsession.
The author of this article is Pepe Escobar, who is the roving correspondent for Asia Times/Hong Kong, an analyst for RT and TomDispatch, and a frequent contributor to websites and radio shows ranging from the US to East Asia.
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This article, from the Wall Street Journal, probably represents Washington's position or hope for the IP Pipeline. The Journal's biases are well-known.
Iran-Pakistan Pipeline Deal Irks U.S
By Annabel Symington
The goal of the pipeline deal is to connect Iran with Asian markets, addressing substantial energy shortages in Pakistan.Pictured, a gas refinery in Qom, Iran, Jan. 5.
ISLAMABAD – In what has been widely perceived as a pre-election stunt, Pakistan has pushed ahead with a controversial pipeline deal with Iran – a move that has irritated the U.S. and that could lead to economic sanctions if Islamabad begins imports of Iranian gas.
Pakistan’s state-owned Inter-State Gas Systems and Tadbir Energy Costar Iranian Co. on Friday signed a contract to lay the gas pipeline in Pakistan. They announced work would start immediately and that the Pakistan portion of the pipeline would be completed in 15 months, though analysts believe that’s optimistic.
The goal of the pipeline is to connect Iran with Asian markets, addressing substantial energy shortages in Pakistan. If the pipeline extends beyond Pakistan, the country stands to profit from substantial gas transit fees.
The U.S. has opposed the pipeline since its inception, promoting the Turkmenistan-Afghanistan-Pakistan-India pipeline as an alternative that keeps Iran firmly out of Asian energy markets.
Washington has made it clear that it will impose economic sanctions on Islamabad if it begins to buy gas from Iran. In a written reply to The Wall Street Journal, the U.S. embassy in Islamabad reiterated the U.S.’s position stating: “Our policy on Iran is well known. We have made it clear to all of our interlocutors around the world that it is in their interests to avoid activities that may be prohibited by UN sanctions or sanctionable under U.S. law.”
The agreement comes 10 years since talks about the gas pipeline first began, and may help address Pakistan’s power shortage, which leaves the whole country in darkness for up to six hours a day. These scheduled power cuts, or load shedding, are used to regulate the electricity distribution system that has been crippled by years of underinvestment.
Iran has already laid a pipeline to the Pakistan border, according to Iranian officials. Once connected at the border, the pipeline will link the port city of Asaluyeh, Iran, to Multan, in Pakistan, and will initially import 750 million cubic feet of natural gas per day. The pipeline will support approximately 4,000 megawatts of power generation per day, eroding Pakistan’s power deficit that currently stands at 5,000 MW per day, according to Pakistan government estimates.
A third arm of the pipeline was initially planned to run from Multan on to Delhi, India, but India withdraw from the project in 2008 after signing an agreement with the U.S. [Note below that India is rethinking its agreement to withdraw from the project.]
While the pipeline could bring relief to energy-starved Pakistan, analysts say that the deal reveals more about the geopolitical dynamics between the U.S., Pakistan and Iran than about the government’s commitment to address the energy crisis.
“The deal will hurt ties between the U.S. and Pakistan,” said Fawad Khan, a senior energy analyst at KASB Securities, a Karachi-based brokerage, “But, the PPP-led government is advertising itself as moving ahead with the deal despite U.S. opposition hoping to win votes from anti-American parties.”
In August, the U.S. tightened existing sanctions against Iran for failing to comply with pressure to halt its nuclear program. The new law, which came into effect earlier this month, closes loopholes in existing sanctions on Tehran, and adds penalties for those seen as aiding Iran’s petroleum, petrochemical, insurance, shipping and financial sectors.
While the U.S. Treasury laid out in December how companies can exit the Iranian market before March 8 without violating the sanctions, Pakistan appears to be heading straight for the forbidden areas.
The threat of sanctions has in the past made Islamabad hesitate. In December, President Asif Ali Zardari cancelled a trip to Iran during which he was widely expected to sign the pipeline agreement.
Iran is providing a loan to Pakistan for a third for the cost of the pipeline, leaving Pakistan with a bill of $1 billion, according to The Nation, a local newspaper.
Pakistan’s finances are weak, with total public debt standing at 68% of gross domestic spending, leaving questions about Pakistan’s ability to foot its side of the bill. A spokesman for the Minister of Finance could not be reached for comment.
Shia-majority Iran wants to assert itself as politically relevant in the region to both counter the U.S. and the influence of Sunni-majority Saudi Arabia, says Abid Sulehri, head of the Islamabad-based Sustainable Development Policy Institute, a research group.
Unlike the worsening security situation and endemic corruption, the energy crisis affects every Pakistani on a daily basis, making it a crucial issue as elections approach.
Analysts say that the recent flurry of activity surrounding the pipeline is an attempt by the Pakistan People’s Party-led government to salvage its dire legacy on energy issues.
Mr. Sulehri described talks with Iran as “symbolic,” explaining that any suggestion that the project will actually move from talks to development is unrealistic. “It would be near impossible to divert the necessary funds to this project like the government is suggesting … as elections are approaching,” he said.
The PPP-led government is using the pipeline talks as a two-pronged way of gaining voter sympathy, said Mr. Khan. Firstly, the government wants to be seen to be making serious efforts to address the energy crisis, he said. Secondly, the government hopes that pushing ahead with the deal in the face of opposition from the U.S. will help counter the PPP’s image as pro-U.S.
Officials from the Ministry of Petroleum did not reply to requests for comment.
Anti-American sentiment is strong in the conservative sections of Pakistani society. It has been galvanized by sense that the PPP has been complicit in the U.S. drone attacks in Pakistan’s boarder regions. The U.S.-led operation that killed Osama bin Laden in May 2011 was also widely seen as an attack on Pakistani sovereignty allowed by the PPP government.
“It might win a few votes from anti-American religious parties,” said Mr. Khan, “But it is a short-sighted move that won’t distract most voters from the energy crisis.”
There are many more easily assessable solutions to the energy crisis in Pakistan, say energy experts. Addressing infrastructure-related inefficiencies would boost electricity supply by up to 15%, says Khaleeq Kiani, an energy reporter with Dawn, an English language newspaper in Pakistan. “Consumers would quickly feel an impact as they would be able to get rid of their costly generators and power back up systems,” he said.
Developing Pakistan’s own gas reserves would also be a much cheaper option than importing gas from Iran. Most of Pakistan’s gas reserves are in Baluchistan, and the security situation in the province has largely scared away investors.
The Iran-Pakistan pipeline would also pass through the volatile province of Baluchistan, which boarders Iran. Mr. Sulehri said that he had not seen any evidence that either Iran or Pakistan has addressed the security challenges that would face the construction and operation of the pipeline.
“This makes me think that the pipeline talks are just about dialogue,” he said.
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The English Guardian is perhaps the most balance reporter:
Iranian-Pakistan gas link has gains in pipeline for Zardari and Ahmadinejad
Mahmoud Ahmadinejad was in jovial mood when he met the Pakistani president, Asif Ali Zardari, and a 300-strong delegation at the Iranian border town of Chabahar earlier this month.
The two men were attending a ceremony to launch construction, on the Pakistani side, of a new pipeline that will funnel natural gas from Iran's South Pars field in the Gulf to energy-starved Pakistani businesses, car drivers and consumers from the end of 2014.
For the smiling Ahmadinejad, the £5bn pipeline serves several key purposes. It will produce hard currency for Iran's hard-pressed economy. It goes some way to mitigating historical suspicions that have separated Shia Iran and predominantly Sunni Muslim Pakistan. It boosts Tehran's regional influence.
But more than that, the pipeline will help break the sanctions stranglehold on Iran's energy sector imposed by the US and western allies concerned about Tehran's nuclear-related activities.
"I'm confident that no foreign element will be able to affect our historic and brotherly relations," the Iranian president said. The pipeline was a symbol of the two countries' independence from "those who only aim to humiliate us, and break us apart, and dominate us ... With natural gas, you cannot make atomic bombs. That's why they should have no excuse to oppose this pipeline."
The revival of the much-delayed project, and the timing of the high-profile joint ceremony attended by diplomats from Arab states, appears, in part at least, to be the product of canny calculations by Zardari ahead of Pakistan's national elections on 11 May.
The Pakistani president, whose own five-year term ends in September, wants to be seen to be doing something about chronic energy shortages that bring daily power cuts and caused a nationwide blackout last month.
But by courting Ahmadinejad, Zardari was also sending a pointed signal to the US government. Pakistan's long-running, ambivalent relationship with its principal financial backer and strategic ally has been more hate than love in recent times.
Strong anti-American feeling, outraged by the 2011 commando raid that found and killed Osama bin Laden on Pakistani territory and by lethal Afghan border incidents involving Pakistani and American troops, is being stoked on an almost weekly basis by US drone attacks. US commentators describe the relationship as "toxic".
In this poisonous context, Zardari's move was seen as a deliberate attempt to emphasise Islamabad's growing freedom of action as the American regional presence declines with next year's withdrawal from Afghanistan.
Anthony Skinner, of the British-based Maplecroft risks consultancy, said: "The Pakistani government wants to show it is willing to take foreign policy decisions that defy the US ... The pipeline not only caters to Pakistan's energy needs but also lodged brownie points with the many critics of the US among the electorate."
Senior Pakistani officials point to a string of decisions by Zardari designed not only to loosen Washington's suffocating embrace but also keep India, Pakistan's major regional rival and sometime foe, at bay. These include his collaboration with David Cameron and Hamid Karzai, the Afghan president, in a trilateral process on Afghanistan's future that has excluded Delhi. The most recent meeting was held at Chequers last month.
Ignoring US and Indian concerns, Zardari has also held out his hand to China, recently transferring management of the highly strategic port of Gwadar from a Singapore company to a Chinese one.
"China's presence in the Gwadar port at the mouth of the Arabian Sea will deter India from carrying out any action planned against Pakistan," Chinese state media dutifully noted.
All this, coupled with his success in holding Pakistan's government together, against all the odds, and presiding over what in May will be the first civilian government-to-civilian government democratic transition in the country's history, has boosted Zardari's stock, opening the way for a possible bid for a second term. "For someone who was not trained as a politician, Zardari has seen everybody off," a senior Pakistani official said. "He's got the better of all of them."
The Obama administration, meanwhile, looks on balefully, struggling unsuccessfully to conceal its displeasure and resist the temptation to hit back with sanctions.
Victoria Nuland, the state department spokeswoman, said: "If this deal is finalised for a proposed Iran-Pakistan pipeline, it would raise serious concerns under our Iran Sanctions Act. We've made that absolutely clear to our Pakistani counterparts."
The US is urging alternative energy solutions on Islamabad, including a notional and, given the security issues involved, rather fanciful plan for a gas pipeline from Turkmenistan to India via Afghanistan and Pakistan.
Washington has also offered help with new hydroelectric dams and other projects. The state department's Patrick Ventrell said: "We really think there are other long-term solutions ... It's in their best interest to avoid any sanctionable activity."
But the senior Pakistani official dismissed such talk as so much hot air. "Hillary Clinton came and offered to help us. But they haven't done anything."
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From New Zealand's NZWeek, but not from any US news outlet I could findd, comes this:
India ready to negotiate on Iran-Pakistan gas pipeline extension
TEHRAN, May 5 — Indian Foreign Affairs Minister, Salman Khorshid, announced here in Tehran New Delhi’s readiness to enter negotiations over the extension of Iran-Pakistan gas pipeline to India, Press TV reported Sunday.
India is ready to participate in the project, Khorshid made the announcement on Saturday in a meeting with Ali-Akbar Velayati, the senior adviser to Iran’s Supreme Leader Ayatollah Ali Khamenei.
On March 11, Iran’s President Mahmoud Ahmadinejad and his Pakistani counterpart Asif Ali Zardari inaugurated a gas pipeline project in Iran’s southeastern Chabahar city, which is projected to link Iran’s gas pipeline to that of Pakistan.
When the 1,600-km pipeline is completed by mid-2014, as scheduled, Iran is expected to export some 21.5 million cubic meters of natural gas to Pakistan on a daily basis.
Khorshid also expressed his country’s readiness to invest in the development of the Iranian port of Chabahar, according to Press TV.
Tehran and New Delhi are expected to ink an agreement to turn Chabahar into a hub for the transit of Indian goods to Afghanistan.
Khorshid arrived in Tehran on Friday to attend the 17th meeting of Iran-India Joint Economic Commission, scheduled to be held in the Iranian capital on May 3-5.
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If it interests you to see how Afghanistan and China fit into the picture from an Indian point of view, see The Hundu.
India to develop Iranian port
Decision on Chabahar spurred by Chinese stake in Pakistan’s Gwadar port
India on Saturday announced its participation in the Chabahar port project — a move that would reinforce New Delhi’s strategic ties with Tehran and Kabul ahead of next year’s withdrawal from Afghanistan by the United States.
The decision to forge a trilateral partnership was announced in Tehran by External Affairs Minister Salman Khurshid.
In a vast tastefully furnished hall in the Iranian Foreign Ministry where he was flanked by his counterpart, Ali Akbar Salehi, and delegates of the two countries, Mr. Khurshid’s words rang loud and clear: “The convergence of views between India and Iran goes beyond the ambit of bilateral relations and extends to the regional and international arena as well. The Chabahar port project is one such area which reflects our commitment to the stability and peace in Afghanistan.”
Analysts point out that India’s participation in upgrading the Chabahar port has deep geopolitical resonance.
The full development of the port would lower landlocked Afghanistan’s dependence on Pakistani ports for assured access to the sea. Besides, the trilateral arrangement could balance joint forays by China and Pakistan into the Indian Ocean. In February, Pakistan decided that China would operate its Gwadar port, just 76 km from Chabahar.
For the first time, Gwadar would provide Chinese ships sustained anchorage in an area on the edge of the Arabian Sea, not far from the Strait of Hormuz, through which the bulk of the world’s energy supplies pass.
Observers say the development of Gwadar may have imparted some urgency to India’s decision to go ahead with the Chabahar project.
Mr. Khurshid made it plain that India’s energetic engagement with Iran was the result of deep deliberation, and could be traced to Prime Minister Manmohan Singh’s visit to Tehran for the non-aligned summit last August. “The visit of the Prime Minister to Iran was a clear expression of India’s commitment and the value we attach to our relations with Iran,” he said. He added that his own visit to Tehran should be seen as the “continuation of this tradition of constructive engagement”.
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