Presented by Lady Michelle-Jennifer Santos, Founder & Publisher
February 21, 2013 (TSR) – Iranian Tadbir Energy began its construction on the Pakistani section of Iran-Pakistan (IP) gas pipeline, also known as the Peace Pipeline, covering 781 kilometers (km) of the total 1,881-km length that will carry Iran’s natural gas to its eastern neighbor, was started on Wednesday.
The Iran-Pakistan gas pipeline, projected to cost USD$1.2-1.5 billion, is aimed to export a daily amount of 21.5 million cubic meters of Iranian natural gas to Pakistan.

Iranian Oil Minister Rostam Qasemi arrived in Pakistan on Wednesday, with a 9-member high ranking delegation, to discuss and convey a special message from Iranian President Mahmoud Ahmadinejad regarding the Iran-Pakistan (IP) gas pipeline project with Pakistani officials.


Qasemi has also revealed to Pakistan Prime Minister Raja Pervez Ashraf during his meeting that Iran has completed work on Iran-Pakistan gas pipeline on its territory.

Pakistan and Iran are forging ahead with the project despite opposition from the US, which has imposed “illegal U.S.-engineered sanctions”, as Pakistani Foreign Minister Hina Rabbani Khar calls it, on Tehran for its alleged nuclear program.

The Iranian cabinet, during a meeting earlier this month, approved a waiver of the Public Procurement Regulatory Authority (PPRA) rules in order to award the contract directly to the Iranian firm which was signed in Islamabad.
“After Russia and China backed out of the project due to U.S. pressure, Pakistan has decided to avail Iran’s offer for financing and constructing Pakistan’s portion of the pipeline,” a senior government official said.
Pakistani public sector firm Interstate Gas Systems and private Iranian firm Tadbir Energy signed the contract.

Adviser to Pakistani Prime Minister on Petroleum and Natural Resources Asim Hussain said earlier that the Iranian company will complete the process of constructing the pipeline in 15 months, according to Pakistan Tribune.

Frontier Works Organisation (FWO), Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines Limited (SNGPL) will also take part in the construction work.

Iranian President Mahmoud Ahmadinejad during his trip to Pakistan on November 22 emphasized the need to complete the Iran-Pakistan gas pipeline according to schedule.

Iran has already built more than 900 kilometers of the pipeline on its soil.

The pipeline will start from the onshore gas processing facility at Assaluyeh in Iran, to traverse a distance of 1,150 km upto the Iran-Pakistan border.

The joint Iran-Pakistan gas contract was signed between the two countries’ officials in the year 2010 and according to it was agreed that the Iranian gas would be transferred to Pakistan from Iran’s Asalouyeh Port in Bushehr province to Bawab Sha Port in southern Pakistan.


Pakistan’s south-western province of Balochistan, which shares long borders with Iran and Afghanistan, is the key area for strategic gas pipeline projects from energy-rich Iran, the Middle East or Central Asia to energy-hungry south and west Asia – and it is not without its geopolitical implications.

The unrest in Balochistan and the anti-Iran activities of Jundallah, a militant group that is believed to be based in Balochistan, make the Iran-Pakistan gas pipeline project a risky venture. Similarly, the proposed Turkmenistan-Afghanistan-Pakistan-India gas pipeline will have to pass through turbulent regions not only in Afghanistan but also in Balochistan.

Iran-Pakistan (IP) gas pipeline project was conceived in early nineties. The gas is to be supplied from Iran’s South Pars gas field and delivered at Pak-Iran border, near Gawadar. The project is being implemented on a segmented approach whereby each country shall be responsible for construction of pipeline in the respective territory.

U.S.A. has strongly opposed the Iran-Pakistan pipeline project, asking Islamabad to abandon the project. Rumors swirled claiming Pakistan agreed to abandon. But that was not true as we see today.

OPERATION ENDURING TURMOIL: The U.S. Strategy drawn up by Neoconservative think tank Project for the New American Century (PNAC) to contain China via destabilization of Balochistan, Pakistan and Afghanistan. Balochistan, is one of the four provinces of Pakistan. It is the largest province by area, constituting approximately 44% of Pakistan's total land mass, and the smallest in terms of population.  Why Baluchistan? Gwadar in the southwest serves as a Chinese port and the starting point for a logistical corridor through Pakistan and into Chinese territory. The Iranian-Pakistani-Indian pipeline would enter from the west, cross through Baluchistan intersecting China's proposed logistical route to the northern border, and continue on to India. Destabilizing Baluchistan would effectively derail the geopolitical aspirations of four nations. (Map: PNAC)
OPERATION ENDURING TURMOIL: The U.S. Strategy drawn up by Neoconservative think tank Project for the New American Century (PNAC) to contain China via destabilization of Balochistan, Pakistan and Afghanistan. Balochistan, is one of the four provinces of Pakistan. It is the largest province by area, constituting approximately 44% of Pakistan’s total land mass, and the smallest in terms of population. Why Baluchistan? Gwadar in the southwest serves as a Chinese port and the starting point for a logistical corridor through Pakistan and into Chinese territory. The Iranian-Pakistani-Indian pipeline would enter from the west, cross through Baluchistan intersecting China’s proposed logistical route to the northern border, and continue on to India. Destabilizing Baluchistan would effectively derail the geopolitical aspirations of four nations. (Map: PNAC)

India, however, walked out of the project in 2009 after the US offered co-operation in civil nuclear energy.

Defying the US pressure, Islamabad and Tehran signed a US$7.5 billion (Dh27.54bn) agreement in Tehran on May 23 2009, finalising the deal to transfer gas from Iran to Pakistan. Exactly one week later, Iran closed its border with Pakistan after a suicide bomb attack on a mosque in Zahidan that caused 20 deaths and many injuries. Jundallah claimed responsibility for the blast.

The diplomatic tension between the two countries mounted at a time when there was no outstanding issue impeding the gas pipeline project. Under the pipeline deal, the government of Pakistan would be responsible to protect the gas pipeline in its territory. The restive Balochistan provides a haven on the frontier for Jundallah, which is fighting for the rights of the Sunni Baloch population of Sistan-Balochistan.

Jundallah has been a source of worry for Tehran. Iran accuses the US of supporting Jundallah, which claimed responsibility for twin suicide attacks on a Shiite mosque on July 15 last year in Zahidan, the provincial capital of Sistan-Balochistan that borders Pakistani Balochistan. Twenty-seven people were killed in those explosions. The Iranian government is reportedly facing domestic political opposition over the pipeline deal, which critics believe is not financially and strategically viable. The Iranian oil ministry had reportedly informed its government of the Jundallah threat to the proposed gas pipeline, the greater part of which has to pass through Balochistan where Jundallah is reported to have roots.

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 in which other pipelines have been attacked in the past.

India has long accused Pakistan of sponsoring cross-border terrorism into Kashmir, while Pakistan accuses India of fomenting insurgency in Balochistan from Afghanistan, where India has a large diplomatic presence. India has so far provided $1.2bn in aid to build economic and social opportunities in Afghanistan since a US-led campaign ousted the Taliban regime in 2001. Washington strongly supports India’s involvement in Afghanistan, while Pakistan is deeply suspicious of it. Islamabad claims that Baloch separatists are backed by India and that is fuelling unrest in Balochistan.

Before December 2005, when a military operation was undertaken by federal authorities in Islamabad for the fifth time to quell an insurgency in Balochistan, there were the provincial government, Baloch nationalist parties, tribal chiefs (Sardars) and the local population who were the major stakeholders in the province’s socio-political scenario. The scenario has changed, as the province is facing an insurgency backed by the separatists, who have emerged as the major stakeholders.

The worsening security situation in Afghanistan and Balochistan has so far been the major reason for delaying any project for importing gas reserves from central Asia to south Asia.

The players in the global energy game are trying to hold stakes in the strategically located Afghanistan and Balochistan, which are the key nodes in pipeline politics in the region.

If India’s interest in Afghanistan is guided by its aim of gaining influence in Balochistan, its support of Baloch separatists would make it a covert stakeholder in the ongoing conflict in Balochistan.

Balochistan has suffered decades of neglect that intensified the feeling of alienation among local people. Baloch nationalists are fighting for their political and economic rights as enshrined in the 1973 constitution of Pakistan. The separatists are struggling for independence of Balochistan, hence they are involved in attacking the security forces, public servants, public installations and innocent citizens.

A transnational gas pipeline could turn the province into an important energy conduit in the region. Balochistan is poised to emerge as the frontline province in transportation of Caspian mineral wealth to the wider world.

The authorities in Islamabad are making an effort to appease the Baloch insurgents through the announcement of financial packages, but this is one deal that might remain a pipe dream.

Pakistan’s Foreign Minister Hina Rabbani Khar said at the parliamentary session last month, ‘The Iranian officials have proposed to establish a new border market at Iran-Pakistan border.

Addressing the MPs, Ms. Khar said, ‘Pakistan has acted responsibly in case of the emerged border tensions with India and has asked for peaceful solving of the issues with India regarding numerous violations of the ceasefire at the Line of Control (LOC) at disputed Kashmir region.

The Iranian-Pakistan Gas Pipeline Routemap, also known as The Peace Pipeline (Map: The Santos Republic)
The Iranian-Pakistan Gas Pipeline Routemap, also known as The Peace Pipeline (Map: The Santos Republic) CLICK IMAGE TO ENLARGE


Excluded from Western Sanctions

Parliamentary Affairs Consultant of Federal Pakistan Government Foreign Minister Palwa Sha Khan said last month imposed sanctions on Iran gas and oil by EU and US do not include joint Iran-Pakistan gas pipeline.

According to IRNA, local sources further quoted Palwa Sha Khan as saying in a meeting with members of National Pakistan Government, ‘Despite the imposed sanctions against Iran, negotiations regarding the project for transferring Iran’s natural gas to Pakistan have had good progress.

Iran has designated a ‘clean’ private company to sign a direct contract under the Iran-Pakistan gas supply project, for which Tehran is also extending a $500 million loan. Tadbir Energy faces no sanctions from any foreign government. It is controlled by the Imam Khomeini Foundation, one of Iran’s largest charitable groups.

Referring to the holding of meetings for providing the required budget for completing the project, he said, ‘During the course of the past year we have had meetings with the Iranian officials regarding the provision of the budget for this project and solving the financial problems.’

Addressing the Pakistani Parliament members last month, Khan said that the Pakistani government has reached noticeable results in talks with the Iranian side regarding providing the required budget for this project.

The Parliamentary Affairs Consultant of Federal Pakistan Government Foreign Minister added, ‘We have signed the agreement for buying and the contract for construction of the part of the pipeline which lies inside Pakistan’s soil, as well.

Pakistani Foreign Minister Hina Rabbani Khar says Iran and Pakistan have made progress in building a multi-billion-dollar gas pipeline, despite illegal US-engineered sanctions.

Addressing a National Assembly session, the Pakistani minister added that Islamabad faced a “huge challenge” to fund the Iran-Pakistan (IP) gas pipeline.

China’s largest bank backing out of a deal to help finance the project last year was a setback for the Pakistani government.

The foreign minister stated that her country has been holding talks with Tehran to find ways to “solve the financial constraints.”

“Pakistan will not pay any money to the company; instead, the Iranian government will pay $500 million directly to the firm for the construction of the pipeline,” a source said.

The Express Tribune reported on January 10 that Iran and Pakistan have devised a plan to finance the gas pipeline on Pakistan’s side without the need for Islamabad to transfer funds to Tehran.

Iran provides the $500 million, while the remaining amount was supposed to be generated through the Gas Infrastructure Development Cess (GIDC). However, the Islamabad High Court recently declared the levy of this cess illegal, and directed the government to reimburse amounts collected to gas consumers. “Therefore, the government may face some problems in generating the remaining funds,” sources said.

On January 29, an Iranian deputy oil minister said Tehran would finance and help build the 700-kilometer tranche of the IP gas pipeline on the Pakistani side.

The cost of construction of the pipeline from Gabd-zero point, on Pakistan-Iran border, to Nawabshah region for the delivery of 750 million cubic feet of gas per day has been tentatively agreed upon at $1.5 billion but Iran has been asked to reduce the per kilometre construction cost.

Sources said Pakistan and Iran had finalised per kilometre cost of laying the pipeline, which will be of 42 inches and spread over 781 km, as well as markup on loan being provided by Tehran.

In the first phase, Iran will lend USD250 million and extend the assistance later to USD500 million to be granted to Tadbir Energy Development Group.

Tadbir Energy was to undertake all engineering procurement construction work for the first segment starting from the Iran-Pakistan border for around $250 million. They also agreed to undertake the second segment of the project, and will increase the financing facility by allocating up to $250 million to the project, subject to discussions regarding its involvement in the distribution of gas in Pakistan later on. It has also agreed to provide and assist in arranging $250 million as supplier credit and any additional financing for the second segment. Basically, the Iranian firm acts as the lead contractor along with the nominated local subcontractor(s).

Under the proposed agreement, Tadbir Energy has to lay the pipeline inside Pakistan and provide $500 million loan, which is repaid as part of gas price, involving an interest rate of about two per cent plus London Interbank Offered Rate.

“Iran had demanded 4 percent interest on loan,” a source said.

The financing will be for 20 years with a five-year grace period.

Pakistan’s engineering and pipeline companies will provide advisory service and the Frontier Works Organisation will handle the civil works.

Tadbir Energy Development group has agreed to complete the project in 15-16 months.

The pipeline is projected to come on stream in 2014.

“No gas discount…yet.”

Iran has been firm not to bring down the price for gas export to Pakistan to match the price agreed for the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project, officials say.

Adviser to Prime Minister on Petroleum and Natural Resources Dr Asim Hussain disclosed that all technical matters for the award of gas pipeline construction contract to an Iranian company had been finalised but that some financial issues still needed to be resolved via a team of Inter State Gas Systems (ISGS) – which works on gas import projects – who had to leave for Iran on Wednesday night to resolve these issues. “Construction contract will be signed in Pakistan,” he said.

Pakistan and Iran have already set the price at 78% of crude oil rate for 750 million cubic feet of gas per day to be transported through a pipeline from Iran’s South Pars field to Pakistan. However, according to an agreement, Pakistan has the right to renegotiate the price if it finds cheaper gas from some other source.

Iran agrees to set up the largest refinery in Gwadar, Pakistan that will also help China to meet its energy needs.
Iran agrees to set up the largest refinery in Gwadar, Pakistan that will also help China to meet its energy needs.

Under the TAPI project, Pakistan will pay 69% of crude oil price for import of 1.3 billion cubic feet of gas per day. However, since TAPI has not started, there will be no discussions yet.

Fars reported that the recent meeting between Iranian and Pakistani officials saw the price for Iranian gas to Pakistan reduced, however no details were disclosed.

The project envisages gas inflows of 750 million cubic feet per day by the end of December 2014, which will be consumed by power plants to generate around 4,000 megawatts of electricity.

The IP pipeline engineering and project management consultant, who was appointed in April 2011, has completed work on a bankable feasibility study, interim front-end engineering design, and a route reconnaissance survey.

Iran to set up largest refinery at Gwadar to also help China

Iran has also agreed to set up the largest refinery in Pakistan at Gwadar Port with refining capacity of 400,000 barrels per day in a joint venture with oil marketing giant Pakistan State Oil (PSO).

“The two countries will ink an agreement on the refinery project during the visit of President Asif Ali Zardari to Iran on February 27,” Hussain said.

Pakistan and Iran agreed to establish the oil refinery during the visit of Iranian Energy Minister Rostam Ghasemi to Islamabad on Wednesday. The Iranian minister also offered to provide liquefied petroleum gas (LPG) to ease Pakistan’s energy woes.

According to sources, Iran will export 400,000 barrels of crude oil per day for the refinery, which is the very reason for setting up an oil pipeline between the two countries.

Experts call the proposed refinery project a major milestone in the wake of handing over of Gwadar Port operations to China. The refinery will help meet oil needs of China as well.


The IP project shall help a great deal in meeting the energy requirements of the Pakistan’s economy.

Rostam said Iran and Pakistan enjoyed close brotherly relations and also thanked Iran for supplying electricity to Pakistan.

The Pakistan president reiterated the commitment of his government to further bolster Pak-Iran bilateral trade by vigorously pursuing mega projects in all areas, particularly energy and economic fields. He also called for greater connectivity between the two countries and stressed the need to move forward on “ECO Container Train” project.

He said regular operation of ECO train would lend impetus to cargo and transit facilities between the two countries.

Zardari called for improved visa facilitation, opening of new border posts and removing tariff and non-tariff barriers for stepping up trade and commerce.

He urged businessmen of the two countries for optimum utilization of the trade and investment potential existing between the two countries. “Pakistan was examining the feasibility of starting special direct flights from Quetta and Gilgit to Mashhad,” he said.

The value of non-oil trade between Iran and Pakistan hit $718 million in the first 10 months of the current Iranian calendar year (March 20, 2012-Janauary 19, 2013), ISNA reported.

The amount showed an 11.6-percent rise compared to the same period in the previous year.

Iran’s and Pakistan’s shares of the bilateral trade were $533 million and $165 million, respectively.

According to Pakistani Senior Minister for Commerce, Makhdoom Amin Fahimtrade, trade between Iran and Pakistan peaked to $1.32 billion in 2008-2009 but subsequently declined to $1.16 billion in 2009-2010 and further to $734.94 million 2010-2011.

Pakistan major items of exports to Iran include rice ($75.11 million), meat and meat preparations ($11.80 million), agricultural products ($6.96 million excluding rice and fruits, non value added textiles ($1.80 million).

Major items of import included petroleum products; however Pakistan’s imports from Iran have decreased from $653.06 million in 2009 to $36.61 million in 2011. Other products include organic chemical ($75.60 million), plastics ($65.37 million), iron ores and concentrates ($38.17 million), and steel ($32.29 million).


Iran-Pakistan-India (IPI), 2700 km, pipeline is aimed to transfer gas from Iran’s South Pars fields in the Persian Gulf to Pakistan’s major cities of Karachi and Multan and then further to Delhi, India, with an estimated value of USD 7 billion.

Iran-Pakistan-India Gas Pipeline (IPI)



Iran-Pakistan-India – IR


7,000,000,000 USD





Recent Update

Construction begins to build Pakistan part of Iran-Pakistan gas pipeline.


Iran-Pakistan-India (IPI) pipeline project (also called peace pipeline) was aimed at constructing a 1,620-mile (2700 km) pipeline from Iran’s South Pars fields in the Persian Gulf to Pakistan’s major cities of Karachi and Multan and then further to Delhi, India. Because of Iran is the most geographically convenient supplier of gas to both countries; Iran is offering to cover 60 percent of the construction costs of the pipeline.

The total length of 2700 km project would run 1100 km in Iran and 1000 km to Pakistan and in case of agreement with India it will continue 600 km in Indian Territory. This project is expected to greatly benefit India and Pakistan, which do not have sufficient natural gas to meet their rapidly increasing domestic demand for energy.

A land-based pipeline would be four times cheaper than any other option, even after taking into account transit fee payments to Pakistan. Pakistan could earn about $200-$500 million annually in transit fees from the pipeline and also would be able to purchase natural gas from the pipeline.

The pipeline can carry 110 million cubic meters of gas a day. 50Mln cm meets domestic needs of Iran and the remaining 60Mln cm will go to Pakistan.

Iran will initially transfer 30 million cubic meters of gas per day to Pakistan, but will eventually increase the gas transfer to 60 million cubic meters per day.

Development Milestones


Iran has increased the price of natural gas it plans to sell to India through Iran-Pakistan-India pipeline to USD 7.2 per mBtu, which makes it the most expensive fuel in the country as of date. Besides, India would have to pay USD 1.1-1.2 per mBtu in transportation cost and transit fee for wheeling the gas through Pakistan, making it the costliest gas in the country, so India had lost interest in the project because it considered that the price proposed by Iran was too high.


Economic Coordination Committee (ECC) of the cabinet approved a rationalised gas import price equivalent to 80 percent of the international crude oil price, removing the final obstacle in the $7.8 billion gas pipeline project with Iran.


Pakistan Federal Cabinet accorded approval to the construction of Pakistan-Iran gas pipeline and gave the go ahead for purchase of 750 million cubic feet gas from Iran to fulfill the growing local requirements.


Iran and Pakistan signed an initial agreement for a USD 7.5bn Iran-Pakistan-India gas pipeline.


Iran-Pakistan gas pipeline project has been formally signed in Istanbul. The agreement was signed between National Iranian Gas Export Company (NIGEC) and Pakistani Interstate Gas Company (PIGC).


900 km out of 1100 km in Iran has been constructed, with a cost of $700 m.


Iran and Pakistan have resolved all issues concerning the long pending IPI pipeline and both the countries are likely to sign a deal soon.


Iran and Pakistan have signed a deal paving the way for construction to start on the IPI gas pipeline. Under the terms of the deal, Iran will supply 750 million cubic feet a day of gas to Pakistan for 25 years.


China has expressed its keen interest to invest of $2.5 billion in Iran – Pakistan Gas pipeline, it is interested to extend the Gas Pipeline Project into its area.


India proposed dialogue with Iran to discuss impediments in implementation of the Iran-Pakistan-India (IPI) gas pipeline. India has been boycotting formal talks on the project since 2007 over security concerns.


Designing and construction of remaining part of the Iranian sector of Peace Pipeline will start as of May 2010.The 900 km, 42 inch diameter (IP) gas pipeline will run from the Assaluyen gas field in southern Iran to Pakistan. Requiring a total investment of $US 3.2 billion, the IP pipeline will have a capacity of 750 MMcm/a.


India has invited Iran for resumption of dialogue on the long discussed IPI project but Tehran is yet to respond. India has proposed a meeting of India-Iran Joint Working Group between May 23-28 in New Delhi but Tehran has not yet confirmed the dates.


Iran and Pakistan signed a “sovereign guarantee” agreement paving the way for the completion of Iran-Pakistan Gas Pipeline. The groundwork of the project would start soon, as the paper work had been completed.


Iran and Pakistan formally signed a deal, which commits the Islamic republic to supplying its eastern neighbor Pakistan with natural gas from 2014.


The Pakistan government has awarded a $55 million feasibility study contract to ILF, of Germany, for the $2.5 billion Iran-Pakistan (IP) gas pipeline project with the condition that the consultant will complete its job in only 12 months, against original plan of 18 months.


The bidding for Pakistan’s part of Iran-Pakistan Gas Pipeline Project would commence shortly,


Pakistan seeks assistance from China to carry out Iran-Pakistan (IP) gas pipeline project to import gas from Iran.


Work on Iran-Pakistan gas pipeline is expected to start in six months.


A feasibility report is being prepared for Iran-Pakistan gas pipeline by NESPAK.


Pakistan plans to borrow $300 million from local banks to build Pakistani side of the Iran-Pakistan gas pipeline.


Chinese companies will help Pakistan to complete Iran-Pakistan gas pipeline project.


A consortium of banks has been formed to finance the Iran-Pakistan gas pipeline project.


The government of Pakistan’s Balochistan Province has agreed to give land for Iran-Pakistan Gas Pipeline project.


Pakistan will complete IP Project instead of sanctions imposed against Iran.


Russia has asked Pakistan to award a $1.2 billion pipeline-laying contract of Iran-Pakistan-India Gas Pipeline to its energy giant Gazprom without going into bidding process.


Pakistan has awarded the $250 million contract for laying of Iran-Pakistan (IP) gas pipeline in its territory to ILF Engineering German company.


The second phase of lying Iran-Pakistan gas pipeline has been started.


Russia has come forward to bail out Pakistan to complete the much-touted Iran-Pakistan gas pipeline and has agreed to fully provide both technical and financial help.


Inter State Gas Systems, an auxiliary organization of Pakistan Petroleum and Natural Resources Ministry, issued pre-qualification of engineering, procurement, construction and commissioning tender for IP pipeline as Iran offered $500 million to Pakistan to build its part of the pipeline.


Pakistani Inter State Gas Systems invited contractors to pre-qualify for the engineering, procurement, construction, and commissioning contract of a 785 km, 42 inch diameter gas pipeline from Iran to Pakistan.


Pakistan and Iran have committed to press ahead with the gas pipeline project and constituted a joint working committee to finalize a deal for laying Pakistan’s portion of the pipeline by Iran.


Pakistan planned gas pipeline will reach border point in first half of next Iranian calendar year beginning 20 March 2013.


Iran-Pakistan gas pipeline will be completed on schedule in 2014 despite the U.S pressures to head off the project.


Iran has designated a ‘clean’ private company, which has not been placed under US sanctions, to take a direct contract for laying a pipeline in Pakistan under the Iran-Pakistan gas supply project for which Tehran is extending a $500 million loan.


Pakistan has awarded Iran’s Tadbir Energy Company a contract to build Pakistan part of Iran-Pakistan gas pipeline.



Construction begins to build Pakistan part of Iran-Pakistan gas pipeline.

GEOPOLITICAL IMPLICATIONS: Pakistan and South Asian Regional Prosperity

Pakistan’s energy mix is dominated by oil and gas. Together they contribute 80% of 56 million tonnes of oil equivalent (MTOE) of primary energy supplies. The other sources include 8% coal, 11% hydro electricity and 1% nuclear electricity.

According to Government’s projections in the Medium Term Development Framework (MTDF) plan, Pakistan’s energy requirement will increase to over 360 MTOE in the next 25 years, more than half of which will have to be imported. Although according to this plan, contribution of oil and gas is projected to drop from the present 80% to about 64%, natural gas is still expected to meet 45% of the primary energy needs at the end of the twenty-five year period.

Pakistan is exploring various options to enhance its gas supplies which are assured, affordable and sustainable on long-term basis so as to maintain the current pace of economic development. To meet this challenge, Pakistan has adopted a two-pronged strategy focusing on: (a) accelerating domestic exploration efforts with more attractive package of incentives for producers; and (b) import of natural gas through transnational pipelines and in the form of liquefied natural gas.

One of the viable gas import options being pursued by Pakistan is import of gas from Iran to Pakistan and its extension to India. Iran as the owner of the world’s second-largest proven natural gas reserves is keen to exploit this resource as a source for its revenues. The biggest potential customers of Iranian gas so far are Pakistan and India.

U.S.A. has been trying to convince Pakistan on doing with them through the Turkmenistan and Afghanistan hydropower and thermal energy projects they are funding to help meet the chronic shortages in the country. But can you see why Pakistan do not want to do it?

For Pakistan, the replacement of imported oil with imported gas will increase energy security both in terms of security of supply as well as security of price in view of the long term contract with dedicated source of supply and guaranteed consumption. It will give relief to the hard-pressed infrastructure of ports, roads and railways which are used in movement of imported oil upcountry. In addition, Pakistan will have a strategic advantage as a transit country.

The South Asia region will benefit from the Iran-Pakistan-India pipeline project as it will provide a foundation for future economic growth, peace and cooperation throughout the region.

It will result in a shift towards more gas-driven and environment friendly energy economies of two major energy consuming countries. Significant direct and indirect economic benefits during the construction and over the life of the project will be generated through employment, transit fees, availability of clean fuel, economic and industrial growth. The project will create major investment opportunities for the entire region including downstream business.

Bottom line, Pakistan is about to become self-sufficient and America does not like it when a nation learns to stand on its own two feet and also bless its neighbors with it.

The Turkmenistan-Afghanistan-Pakistan-India pipeline project is expected to open up central Asia’s vast natural gas reserves to the wider world for the first time. The objective of the project will be achieved if political stability returns to Afghanistan and Pakistan.

Balochistan is a key node to corner central Asia’s mineral wealth through trans-Afghan links to world markets. Its geo-strategic location makes it the most attractive for transit traffic to the landlocked Afghanistan and the central Asian republics (CARs).

You see why the U.S.-NATO drones need to be sent and the threat of illegal sanctions?

“Washington has made it clear that it will impose economic sanctions on Islamabad if it begins to buy gas from Iran. Besides, the UN mandated sanctions on any trade with the oil-rich country,” the Wall Street Journal said in a report.

Pakistan is inches away from becoming an important energy conduit in the region.


Syed Fazl-e-Haider, a development analyst in Pakistan, also contributed to this report.


Please enter your comment!
Please enter your name here