Peace Pipeline or Pipedream?
The proposed US$7 billion Iran-Pakistan-India (IPI) 2720 km gas “peace pipeline” project is expected to take three to five years to complete. While Pakistan’s demand for gas will expand significantly over the next two decades, India’s need is far more. Presently using 100 million cubic metres per day, this will double in the next 7-8 years. With decline in its reserves India estimates using 400 million cubic meters of gas per day by 2025, almost four times more than in 2005. Having the world’s second largest gas reserve, Iran is the most geographically convenient supplier of gas to both Pakistan and India.
Showing ambivalence for the project because of US pressure, India has three options for acquiring gas from Iran: viz (1) in LNG form in tankers through the Arabian Sea (2) through a deep sea pipeline or (3) through land route. The land-based option is four times cheaper than others, when including transit fee payments to Pakistan. From South Pars, a pipeline will stretch over 1,100 km within Iran before entering Pakistan, travelling through Khuzdar. One section will run South to Karachi, the main section going through Multan to the Indian border (760 kms), thereafter travelling 860 kms to Delhi. Pakistan and Iran signed a preliminary agreement in 1995 for the construction of a natural gas pipeline linking Karachi with the South Pars natural gas field. Iran later proposed an extension of the pipeline into India, with Pakistan standing to benefit from transit fees. For the record Pakistan is asking for 10% of gas price ie. US 50 cents per million British Thermal Units (MBTU) while India is willing to pay only US cents 15 per MBTU.
Political tensions with Pakistan deterred Delhi from creating any economic attachment with Pakistan. Recent improvement in the relations revived the project. With China willing for oil and gas for its Southwestern Provinces the grid would mean additional transit fees for Pakistan. For India, the number of pluses include viz (1) the pipeline project opening up a new and potentially exciting chapter in the bilateral relationship between Islamabad and New Delhi, each side getting an economic stake in the other (2) engendering stability and predictability in the political equation and (3) the IPI grid being extended into Turkmenistan to allow Central Asian and Caspian gas to flow in. Finally, the grid could be extended eastward from India through Bangladesh to northern Myanmar and China’s Yunnan province, thereby tying India, China, Pakistan, Iran, Bangladesh and Central Asia into a vast common energy grid that would lower costs of transportation all round.
All great strategic projects face different challenges relative to their size, people or groups in these three countries are opposed to the pipeline for various historical, political, and even national reasons. Other problems are caused by some extra-regional countries because the project reduces their geopolitical importance in the region and deprives them of the markets they have monopolized during the absence of Iran. Faced with a litany of accusations despite being in the forefront as a US ally in the “war against terrorism”, the US opposition to the peace pipeline could be the straw that broke the camel’s back, signaling a major re-alignment of Pakistan’s foreign policy. Recent statements and initiatives resemble a snub of sorts to the US, given Pakistan’s servility to the US for over 50 years.
The pipeline route passes through Balochistan and Punjab in Pakistan. Strategically important due to its large reserves of oil and gas, Balochistan is one of Pakistan’s poorest areas and a restive Province, dominated in recent years by private militias belonging to Baloch Sardars. Sporadic armed clashes still occur with attacks on water pipelines, power transmission lines and gas installations. Lack of economic progress and a deep sense of disaffection has contributed to the distrust between the Federal Government and the Baloch population, exploited by Baloch Sardars and their motivated interests in opposing any energy-related projects in their area. Tough measures to curtail the influence of renegade tribal chieftains aside, a number of development projects have been initiated by the government for bettering the socio-economic situation in the province. Grievances of the local population have still not been addressed satisfactorily but while the situation is still not fully under control, it is getting better by the day. Acts of sabotage and terrorism have also greatly abated. The primary beneficiary of the economic gains from transit fees should be shared by the locals in the form of royalty and job opportunities for the Baloch, with locals directly responsible for the security of the pipeline traversing in their territory.
Iran’s relations with Pakistan are strategically important, never more so than at the present time. With American troops stationed in neighboring Afghanistan and Iraq, Iran is trying to check U.S. influence in the region by strengthening its ties with Pakistan, a most needed (and most vilified) US ally in the war on terror. Pakistan has a common cultural background with Iran and close cooperation in some fields, on the negative side there are strained relations viz (1) due to sectarian issues which have become more virulent lately (2) distinct differences in the attitude of the two countries towards the US and (3) conflicting interests in Afghanistan. Pakistan has no border issue with Iran but it shares the territory inhabited by Baloch, several times these tribes have created trouble between the two countries. A Balochi Sunni terrorist group “Jundullah”, believed to be financed by the CIA, is carrying out terrorist attacks in Iran operating from Pakistani Balochistan.
Even if Iran’s nuclear problem is peacefully resolved, the US will continue their opposition to Iran’s development and integration into the region. Washington wants to use local countries to maintain its influence in the region, from using the Shah of Iran as “policeman” for the region, the US has now turned to India, not only in that role but to contain China. The US upped the ante by striking a civil nuclear energy cooperation deal to meet all of India’s energy needs, the US says there is no need for the pipeline. And what about the energy needs of Pakistan, the supposed “cornerstone of US policy”? While stating it has no problems with nations doing business with Iran, the US is using pressures on those countries and offering diverging incentives, it is perpetuating conflicts and preventing efforts at regional economic cooperation.
Apart from the economic value for Pakistan and the other countries involved, the pipeline project is an important geo-political crossroads opportunity for (1) a new political alliance in the region, making the region (and Pakistan) less vulnerable to American pressure and influence and (2) with the absolute subservience to the US coming to a close, creating a new political and more equal partnership based on pragmatic mutual interests. The peace pipeline needs India’s participation, but if for any reason India should opt out, Pakistan cannot remain hostage to the third party influence on India, national (and economic) interests dictate a go-it-alone policy. If the peace pipeline is a pipedream, an Iran-Pakistan pipeline is still a very feasible proposition, not only economically but geo-politically.
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