FACTORS HAMPERING GROWTH
June 28 - July 04, 2010
In the wake of depleting resources and rising demand of natural gas, Pakistan is in dire need of getting gas from different sources.
Business persons, economic experts, and politicians term Iran-Pakistan Gas Pipeline Project as beneficial largely for the country and unanimously said that country's future is linked with the materialisation of this vital project.
They said economic ties between Iran and Pakistan would expand at all levels with the materialisation of this project.
Natural gas shortage is damaging Pakistan's economy and Islamabad needs to show strong commitment and resolve to start import of natural gas from Iran as soon as possible, leading businessman and Pakistan industrial and traders association front (PIAF) Chairman, Irfan Qaiser Sheikh said.
He was of the view that this project of vital importance must not be linked with the country's foreign policy. It is in the interest of the country to start work on this project as early as possible and country would only be able to meet its future energy requirements with such projects, he said.
The business community would not allow anybody to succumb to foreign pressure regarding Iran-Pakistan gas pipeline project, as abandoning this project would be like committing "economic suicide."
After 14 years of on and off negotiations over gas project with Iran, Pakistan recently signed a gas pipeline accord with Iran without India's participation.
Under the gas sale purchase agreement signed between the Iranian National Oil Company and Interstate Gas System of Pakistan, Iran will provide 750 million cubic feet of gas per day to Pakistan for the next 25 years. The project entails first gas inflows by the end of 2014 that could be advanced by one year if domestic gas companies were engaged to construct about 750 kilometers of the pipeline.
Economists termed the deal a major breakthrough and an achievement that would greatly help Pakistan meet its energy needs.
The $7.6 billion gas project is considered in the interest of Islamabad, as it would help the country to meet its energy requirements in next two decades. However, Prime Minister Syed Yousuf Raza Gilani surprised most people in the country by announcing that Islamabad would abide by any US sanctions on Iran, which experts believe is tantamount to jeopardise the much-needed Pak-Iran gas pipeline project.
At the time when Pak-Iran gas pipeline project was said to be in its final stages, the US Special Envoy Richard Holbrooke advised Pakistan against the project with Iran, with a warning that such a move could hit Pakistani companies involved in the project.
There are some analysts in Pakistan who had suggested the government to shelve the multibillion-dollar gas project with Iran and instead invest in domestic resources such as coal, wind and water to meet energy requirements.
Responding to the statement of Richard Holbrook, Jamaat-e-Islami Pakistan senior leader Senator Professor Khurshid Ahmad said that this is no business of the US to interfere in our sovereign dealings.
The Parliament should express its solidarity with Iran. He said, "Iran has every right to develop its nuclear technology for peaceful purposes and the US bid to impose sanctions on Iran is an act of aggression." Pakistan and all Muslim countries and the third world countries should resist US efforts to impose its policy on the world community, he added.
Contrary to statement of Prime Minister, Foreign Minister Shah Mehmood Qureshi defended the Iran gas pipeline project saying Islamabad will take the project forward despite sanctions on Iran.
Qureshi's comments came hours after US Special envoy for Pakistan and Afghanistan Richard Holbrooke warned Pakistan against the pipeline intended to bring the much-needed natural gas to the energy starved country. "The gas pipeline project with Iran is in Pakistan's interests," the Pakistani Foreign Minister said.
Qureshi said that Pakistani experts are of the opinion that sanctions on Iran will not affect gas pipeline project as it is a bilateral agreement and both countries have already finalised the deal. He said that gas pipeline deal with Iran will not violate international laws, adding Pakistan will focus on its interests without violating international laws.
The Pakistani Foreign Minister said sanctions on Iran have not been imposed for the first time and that the Islamic republic had also been slapped with curbs three times before. He added that it is fourth time that Iran has been sanctioned, adding that if these sanctions have been imposed under chapter 7 of the UN then all UN members will apply and Pakistan will respect it like other countries.
It may be noted that the pipeline project was initially mooted to carry gas from Iran to Pakistan and on to India. India withdrew from negotiations last year after signing a nuclear deal with the United States, but has kept open the option of rejoining the project at a later stage.
Iranian ambassador in Islamabad Mash'Allah Shakeri said the multi-billion Iran gas pipeline has enhanced Pakistan's strategic importance, particularly in relation to India. "In addition to the added economic value of billions of dollars, the Iran gas pipeline agreement has boosted the strategic value of Pakistan in the region. If there is any third country recipient, they have to recognise that Pakistan is going to provide a peaceful passage," Shakeri said.
The US special envoy to Pakistan said he had warned Islamabad against signing a deal with Iran on a gas pipeline, saying the US was preparing laws that could affect the project. "We cautioned the Pakistanis not to over-commit themselves until we know the legislation," Richard Holbrook, US special envoy to Afghanistan and Pakistan, said.
"Pakistan has an obvious major energy problem. We are very sympathetic to it. In regard to the specific project, legislation is now being prepared which may apply to this project," said Holbrook.
Experts said, "Gas pipeline project with Iran is a milestone toward meeting energy needs of the country." The pipeline will connect Iran's South Fars gas field with Pakistan's southern Balochistan and Sindh provinces.
They said Iran has the world's second-largest gas reserves after Russia. But sanctions by the West, political turmoil and construction delays have slowed its development as an exporter.
Former Foreign Minister Khurshid Ahmed Kasuri said that the US is not happy over Pak-Iran gas pipeline agreement as it wanted Pakistan gets gas supply connection from Turkmenistan instead of Iran.
At a time when Pakistan is facing persistent shortage of electricity, abandoning vital Pak-Iran gas project may prove disastrous. Therefore, it is necessary to move ahead on this project without accepting any external pressure. Things are moving fast, our policy makers need to focus to safeguard country's interest and meeting its basic needs otherwise it may prove devastating.