Daily Times

Swift approval of the Cabinet Committee of Energy to start construction work on the Iran-Pakistan gas pipeline project came as a major decision from the new government after taking formal charge of the governance. However, this issue is quite intricate and tricky. US-Iran tensions vis-à-vis sanction imposition, energy shortage and likely $ 18 billion penalties on non-compliance with the bilateral agreement have made things harder for Pakistan.

Before the PMLN government, the outgoing caretaker cabinet approved the construction of an 80-kilometre section of the pipeline in February. This hasty approval was primarily focused on avoiding the $18 billion penalties looming over the head of Pakistan for delaying the accomplishment of the project. Pakistani officials say the project is being prioritized due to a growing gap between gas demand and supply, with piped gas seen as a more cost-effective alternative as compared to imported liquefied petroleum gas (LPG). Unprecedented economic crisis revolving around currency devaluation, political disorder and energy shortage logically justifies the recent renewed desperation on the part of Pakistan to proceed with the pending project.

Cost-effective procurement of gas from Iran would reduce the burden on the industry sector. This is also an undeniable fact that delays are frustrating Iran, which has already invested $2 billion in its section of the pipeline whereas Pakistan remains vulnerable to an $18 billion penalty for termination of the agreement. Major irritants are emerging from the American side. The US State Department has said it does not support Pakistan’s plan to build a pipeline to import gas from Iran. State Department spokesperson Mathew Miller refused to comment on the nature of sanctions Pakistan could face for importing energy from Iran.

If India can go hands-in-gloves with Iran to operate the Chah Bihar port without agitating the US, the completion of a harmless gas pipeline should not be exaggerated with undue overreactions by the US

However, he cautioned against going ahead with the plan. He said “But we always advise everyone that doing business with Iran runs the risk of touching upon and coming in contact with our sanctions, and would advise everyone to consider that very carefully. The assistant secretary made clear last week, we do not support this pipeline going forward.”

Donald Lu, Assistant Secretary of State for South and Central Asia told the House Foreign Affairs Committee in a congressional hearing that importing gas from Iran would expose Pakistan to US sanctions. There is a prevailing perception that Pakistan desperately decided to proceed with building the pipeline following the tit-for-tat missile strikes with Iran.

Even though tensions between Iran and Pakistan have since eased, strong concerns persist regarding the looming threat of a potential $18 billion penalty for failing to complete the project in time. Certain quarters have quoted the precedence of the Iran-Gwadar electricity transmission line, which was built from scratch during the PDM tenure in 2022-23, as a testament to creative problem-solving enabled by a relatively modest financial investment. It seems this transmission line model is now being applied to the gas pipeline project, with a significant reduction in scope from 2,775km to a mere 80km, all within the Pakistani territory.

The looming threat of Iranian penalties might be a factor in hasty pursuance of the project. However, by splitting the project into smaller, more manageable segments, there is a chance to evade potential US sanctions. Obstacles laid by the US in the undertaking of the gas pipeline project are likely to create a wedge in already fluctuating bilateral ties with Pakistan.

Tall US claims of considering Pakistan as a major non-NATO ally must be substantiated with a solid solution for the sanction problem. The precedent of granting the waivers to friendly countries should be fairly followed in this case as well. Despite imposing multiple sanctions on the Kremlin in the backdrop of the Ukraine war, EU members continue to rely on the Russian gas supply. The US and its NATO allies have not yet asked India to reconsider oil and arms imports from Russia.

U.S. Congress has granted a special waiver to India for the procurement of the Russian S-400 Missile system. Raising eyebrows on Pakistan for building a gas pipeline project, primarily needed to ease the economic crisis, reflects the American discriminatory approach. Pressing further on this non-friendly stance would ignite public sentiments against the US.

If India can go hands in gloves with Iran to operate the Chah Bihar port without agitating the US, then the completion of a harmless gas pipeline should not be exaggerated with undue overreactions by the US. Hopefully, the foreign office will be vigilantly forthcoming in removing the irritants with efficient diplomacy.

A graduate of QAU, PhD scholar & freelance writer. Can be reached at fa7263125@gmail.com