The Iran-Pak Gas Pipeline project once again seems to be in jeopardy. Initially started as an Iran-Pakistan-India gas pipeline in the 1990s, the project, later, turned into a bilateral contract after India withdrew in 2008. For an energy-deficient country like Pakistan, the Iran-Pakistan gas pipeline offers a promising opportunity as it has the potential to supply 750 million cubic feet of gas per day to Pakistan. However, owing to the thorny relations between Iran and the US, the IP pipeline has faced several delays since the beginning. The strained relations between KSA and Iran in the past are also believed by some to be another hindrance in the way of completion. Though the normalization of ties between KSA and Iran has given Pakistan a sigh of relief, the US sanctions on Iran still act as an impediment in the way of taking the project to the finishing line.
Iran completed its part of the project almost a decade ago. Seeing Pakistan dithering over completing construction on its side of the border, Iran has given the deadline of September 2024. In case the project remains incomplete, the latter will take the matter to an International court and Pakistan will have to pay a penalty of around $18 billion. Provided the economic crunch that Pakistan is currently facing, it is in no position to pay the fine. Hence, the government announced to resumption of work on the pipeline. However, the announcement did not sit well with the US as the U.S. State Department spokesperson conveyed that Washington does not support the Pakistan-Iran gas pipeline project from going forward and cautioned about the risk of sanctions in doing business with Tehran. The Assistant Secretary of the State, Donald Lu, also expressed opposition earlier in the last week.
Giving Pakistan a green signal on the gas pipeline project may be used against Biden by his political opponent, Donald Trump, during the 2024 election campaign
Pakistan is walking on a tightrope right now. On one hand, it is presented with the risk of a billion-dollar penalty while on the other hand, it can not displease its biggest financial donor. To get out of this predicament, the Pakistani government is currently considering engaging an international law firm to seek a US sanctions waiver. Given that Pakistan and US relations are at an all-time low under the Biden administration, convincing Washington is likely to be a challenging task for Pakistan. Moreover, it is also believed by some that giving Pakistan a green signal on the gas pipeline project may be used against Biden by his political opponent, Donald Trump, during the 2024 election campaign and Joe Biden would never risk his vote bank.
The US’s approach to sanctions in South Asia appears to be dual-faced. In the wake of its attack on Ukraine, Russia is under CAATSA sanctions (Countering America’s Adversaries Through Sanctions Act) but India has been granted a waiver thereby allowing its trade with Russia to continue. This is despite concerns about Russia’s geopolitical influence. On the other hand, US sanctions on Iran completely halt the Pakistan-Iran gas pipeline project, a vital source of energy for Pakistan. The US, right now, shows no sign of budging on this matter. This dual standard by Washington raises questions about the fairness of its foreign policy in the region.
The policies of past Pakistani governments have also played a role in the stalled progress of the pipeline. The issue did not arise overnight. As mentioned earlier, Pakistan has been facing implementation issues on the project since the beginning. It could have struck a deal with the US regarding this issue when US-Pak relations were at their peak during the war on terror. However, the lack of commitment and dedication by the successive Pakistani governments has kept the issue lingering and unresolved. Can Pakistan secure the project it desperately needs? Or will the gas pipeline be a monument to lost opportunities? Only time will tell.
The writer is a freelance columnist.