Russia eyes Iran-Pakistan gas pipeline

Russia eyes Iran-Pakistan gas pipeline

Petroleum minister says Vienna deal should allow Pakistan to finish pipeline, buy Iranian gas

A landmark deal on Iran’s nuclear programme has breathed new life into plans for a gas pipeline through Pakistan ─ and sparked a geopolitical tussle with Russia looking to expand its influence, a foreign news service quoted observers as saying.

With sanctions on Iran likely to ease and peace talks between the Afghan government and the Taliban getting under way, wrangling is intensifying over the proposed pipelines which would link Central Asia to the Middle East.

Lastweek, Pakistan hailed the nuclear deal struck after long negotiations in Vienna, as reviving a stalled project to pipe gas from southern Iranian fields to Pakistan that is desperate for solutions to a long-running power crisis.

The $7.5billion Iran-Pakistan pipeline was inaugurated with great fanfare in March 2013 ─ but the project immediately hit quicksand in the form of international sanctions on Tehran which meant Pakistan struggled to raise the money to build its side.

Federal Minister for Petroleum and Natural Resources ShahidKhaqanAbbasi said that the Vienna deal should allow Pakistan to make good on its agreement to finish the pipeline and buy Iranian gas. “Now hopefully, as the sanctions are removed, it facilitates us to address our energy need and also meet the contractual obligation,” he said.

Iran has already built its part of the 1,800kilometres pipeline which should eventually link its South Pars gasfields to Nawabshah, close to Karachi. As part of an ambitious $46 billion economic corridor linking western China to the Middle East through Pakistan, Beijing recently started work on the section of the pipeline between Nawabshah and the Gwadar port, close to the Iranian border.

Once this is completed, Pakistan will build the last 80 kilometres to Iran ─ before the 2018 general election, the government hopes ─ and it could in future extend the connection northeast to China, according to government sources.

 – Moscow fuel –

Russia is interested in supporting the Iran-Pakistan pipeline through energy giant Gazprom, according to the Russian Embassy in Islamabad. Moscow has historically had closer relations with India, but is pivoting more to Islamabad as New Delhi and Washington become closer allies.

YuryBarmin – an analyst specialising in Russia’s Middle East policy – said that by using the Iran-Pakistan gas pipeline to get closer to Pakistan, Moscow wanted to show India it had other options in the region. “At the same time, Russia really wants to explore commercial opportunities for its defence industry in the wider Middle East region, and Pakistan is probably the only remaining untapped market for Moscow in that sense,”he said.

Islamabad and Moscow signed a defence cooperation agreement in November last year. The two countries are also close to finalising an agreement to build a gas pipeline linking Karachi, which has an LNG terminal, to the eastern city of Lahore, said MobinSaulat, the CEO of Inter State Gas Systems, the publicly-owned company in charge of gas pipelines in Pakistan.

Saulatsaid these moves meant that the Turkmenistan-Afghanistan-Pakistan-India pipeline (TAPI), an even more ambitious project, would likely take a back seat for now. “LNG is happening already, we have the supply in place, the happening of Iran-Pakistan with the latest development is of course next. And TAPI, in the list, will come at the end,” he said.

TAPI, valued at up to $10 billion, would pump gas from Turkmenistan to Pakistan and India through Afghanistan. But it is politically complex, requiring cooperation between at least four governments, and logistically challenging, as the pipeline would pass through areas of Afghanistan and Pakistan.

 – France-Russia: duo or duel? –

Last September, France’s Total was working to take the lead on TAPI, but the rise of Russian interest could change the field. “They are talking to three companies, Total is number one and then a Russian and a Chinese company. Total definitely is the most advanced in the talks,” the petroleum minister said, citing briefings from the TAPI steering committee.

Russian participation in TAPI would eventually allow Moscow to connect the pipeline to others in the former Soviet Union, Barmin noted.

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