Islamabad firm on Iranian gas
KARACHI - The possible entry of Russia into the proposed Iran-Pakistan (IP) project has raised concerns in Washington, which is strongly opposed to gas imports from Iran. Russia is ready to finance and build not only the IP pipeline but also the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline under a government-to-government deal reached between Islamabad and Moscow last month. US Ambassador to Pakistan Cameron Munter at the weekend reiterated that Washington had its reservations on IP gas pipeline project.
Washington is pushing for tougher economic sanctions against Iran over its nuclear plans. US Secretary of State Hillary Clinton in February warned Islamabad of the consequences for the country’ weak economy of pursuing a pipeline from Iran as it could result in US sanctions being extended to Pakistan.
The decision with respect to financing of IP and TAPI pipelines was taken at a meeting of Pak-Russia Joint Working Group on Energy. Financing has so far been the key issue causing delays to completion of the IP project. The Industrial and Commercial Bank of China (ICBC) in March refused to sign a contract for financial advisory services to raise funds for the IP pipeline apparently due to US pressure.
Pakistan has agreed to award contracts without bidding for both the IP and TAPI gas pipelines to Russia, which has agreed to build them at an accumulated cost of US$9.2 billion. Pakistani Petroleum authorities have submitted complete technical details of both projects to a visiting Russian delegation led by Deputy Minister for Energy YP Sentyurin, who last month called on Asim Hussain, Adviser to the Prime Minister on Petroleum and Natural Resources, in Islamabad.
The country will have to waive Public Procurement Regulatory Authority (PPRA) rules if it awards the contracts for laying pipelines in its territory to Russian energy giant Gazprom. China may yet also join the project after entry of Russia in the IP gas pipeline, which could be extended to western China via the Karakorum highway The two countries are expected to sign a memorandum of understanding (MoU) on gas import projects in the next two to months.
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