IP GAS PROJECT AND BALOCHISTAN UNREST
June 28 - July 04, 2010
This month, Iran finalised a US$7 billion Iran-Pakistan (IP) gas pipeline deal to export natural gas to Pakistan by 2015. The IP pipeline, which will connect Iran's giant South Pars gas field with Pakistan's southern Balochistan and Sindh provinces, is crucial for the strife-torn country to avert a growing energy crisis already causing countrywide severe electricity shortages. The two sides have already discussed the technicalities involved in the construction of the IP gas pipeline that will be built under the segmented approach under which Iran will construct the pipeline in its area and Pakistan will construct in its own area from Iran border.
The pipeline was originally planned to extend from Pakistan to India in 1993. Though India walked away from the project last year, yet it keeps her option open to join the project in a later stage. Under a deal signed in March, Pakistan will be allowed to charge a transit fee if the proposed pipeline is eventually extended to India. Analysts believe that without restoring peace and stability in Balochistan, the IP project is likely to meet the same fate of Turkmenistan-Afghanistan-Pakistan (TAP) gas pipeline project, which is still in doldrums due to uncertain security situation in Afghanistan.
Pakistan's Inter State Gas Distribution Company (ISGDC) has already floated a proposal for laying IP gas pipeline. Under the plan, Iran would build the pipelines from its Pars Gas Field to Jiwani in Balochistan (near Pakistan's border), while Pakistan would lay the pipelines from its side up to Jiwani. This would greatly save the cost of the proposed IP gas pipeline project. Jiwani is a coastal town along southwest coast of Pakistan near Gwadar.
Under the Pak-Iran deal, the 2100-kilometer pipeline would enter Pakistan from its border near Gwadar in insurgency-hit Balochistan province. A stable Balochistan is essential for the success of proposed gas pipeline project, as greater part of the pipeline will have to pass across the province.
Last month, the two countries signed the sovereign guarantee agreement, which was the final deal after 17 years to kick off physical work on the much-delayed IP gas pipeline. The sovereign guarantee agreement made Gas Sales Purchase Agreement (GSPA) signed by the countries last year in Istanbul, effective. Under the GSPA, Iran agreed to export 750 mmcfd with a provision to increase it to one billion cubic feet a day (bcfd) at the rate equal to 78 percent of crude oil for the next 25 years. The volume of imported gas, which will be about 20 per cent of the country's current gas production, will be provided to the power sector to generate about 5,000 megawatts of electricity.
Pakistani officials have projected a gas shortfall of 10.34 bcfd by financial year 2015. The indigenous gas supply has been projected at 2.16 bcfd against the current gas supply of 4.3 bcfd. The demand for gas would stand at 12.5 bcfd by 2015. According to the official sources, about 48 percent of thermal power generation is based on furnace oil, out of which about 62 percent was imported at a cost of over $2 billion in 2007-08.
Iranian government is reportedly facing opposition from political circles over IP pipeline deal which the critics believe not viable financially and strategically. Iranian Oil Ministry had clearly informed its government of Jundullah threat to the proposed gas pipeline, the greater part of which has to pass through Balochistan where Jundullah Group is reported to have roots.
Iran closed its border with Pakistan following a suicide bomber attack on a mosque in Zahidan on May 28 last year, which took over 20 innocent lives and injured many people. Jundullah Group claimed responsibility for the blast. The Group has been source of worry for Tehran fearing that Islamist Group may create hurdles in materialising the project.
The diplomatic tension between the two countries mounted at a time when there was no outstanding issue impeding the project for laying a gas pipeline between the two countries. Under the IP pipeline deal, the government of Pakistan would be responsible to protect the gas pipeline in its territory.
India has been calling the proposed gas pipeline from Iran across Pakistan 'a risky venture' that would be difficult to finance. It has been expressing its concern over security for the pipeline, which has to run across volatile areas like Balochistan where other pipelines have been attacked in the past. Islamabad has however repeatedly been rejecting the India's security concern contending that it can effectively handle the security of the proposed IPI gas pipeline. Pakistan claims that it has been looking after the 6,000-kilometer-long domestic pipeline network that provided gas countrywide. But the fact contradicts the country's claim, as the incidents of targeting gas installations and blowing up of gas pipelines have presently become a routine in Balochistan. The acts of sabotage in the province have several times forced the gas company to shut off the main compressor plant, thus suspending gas supply to parts of Balochistan, and other provinces of Sindh and Punjab.
For the last four years, the forces of destabilisation have been in full romance creating an insurgency like situation in the province. For some players of geopolitics, the developed, open and stable Balochistan is a threat to their interests. A volatile Balochistan does serve their strategic interests, as the unrest in the province not only preempts Chinese but also discourages development activities and foreign investment in the province. There are certain elements in the geopolitics, who are engaged in sabotaging the development process through masterminding acts of terrorism in Balochistan. The practitioners of dirty geopolitics and the protagonists of power politics in global arena have keen eye on the new developments taking place in the province, which is strategically located in the region of immense geo-economic and geo-political importance.
We cannot ignore the rapidly changing geopolitical realities and new developments in the region. Our national interest demands an early resolution of conflict and restoration of peace and stability in Balochistan. The long history of neglect and discrimination against Balochistan and the military operations undertaken in the past have turned it into a mega sensitive province. What is immediately needed is to assuage the local people's grievances and resolve all issues through a political reconciliation before the province turns into an arena of geopolitics.