High pressure: President inaugurates historic Pak-Iran gas pipeline

[farhan_9909]

CHAHBAHAR: President Asif Ali Zardari along with Iranian President Mahmoud Ahmedinejad inaugurated the multi-billion dollar Pak-Iran gas pipeline in Chahbahar on Monday, reported Express News.

The contentious gas pipeline was inaugurated by Zardari as he pulled the rope to reveal the foundation-laying plaque on the Pak-Iran border for the 1,600 kilometre long pipeline.

A 300-member strong Pakistani delegation led by President Zardari and comprising the country’s foreign minister, petroleum minister and National Assembly speaker and a number of prominent politicians attended the historic ceremony.

Foreign ministry spokesperson Moazzam Ali Khan said several heads of states had also been invited at the inauguration — an event that will see the two neighbouring states sign a crucial yet controversial mega project aimed at easing Pakistan’s energy crisis. However, he refused to give any further details.

One official pointed out that the high-powered inauguration clearly indicated that Pakistan would pursue the project at all costs.
The US has issued warnings to invoke economic sanctions already in place against Iran if Pakistan went ahead with its plans to import natural gas from the Islamic republic.

High pressure: President inaugurates historic Pak-Iran gas pipeline – The Express Tribune

probably the first and only step taken by this govt in the interest of Pakistan just 5 days before they are leaving forever

 

[muse]

Iran-Pak pipeline: Still a Pipedream
Michael Kugelman
2 hours ago

So the pipeline is certainly a good idea. But is it a feasible idea? I fear not—and for reasons having little to do with US sanctions on Iran. DESIGN: JAMAL KHURSHID

It’s official; the Pakistan-Iran pipeline project will soon be underway.

Work is scheduled to begin on the Pakistan side today (Iran’s portion is nearly done), and is expected to be completed in less than two years.

Predictably, Washington is not pleased.

“We think that we provide and are providing the Pakistani government and people a better way to meet their energy needs,” a State Department spokesman recently declared.

That’s a questionable claim. US officials have been trumpeting their investments in hydropower projects, which are intended to generate more than 1,000 megawatts of power. Yet the pipeline is expected to provide more than 4,000 MW.

Indeed, from a pure supply/demand argument, the pipeline is a no-brainer. Pakistan is suffering through its worst gas shortage on record, and the nearly 22 million cubic meters of gas it promises to deliver to Pakistan daily could go a long way toward alleviating the country’s acute energy crisis.

So the pipeline is certainly a good idea. But is it a feasible idea? I fear not—and for reasons having little to do with US sanctions on Iran.

Many scoff at the idea of constructing the Turkmenistan-Afghanistan-Pakistan-Iran pipeline because of Afghanistan’s lack of security. Yet the same argument applies with its Pakistan-Iran counterpart. The Pakistan portion is expected to extend across nearly 800 kilometers, and will traverse Balochistan.

Is it realistic to expect that Balochistan-based Sunni sectarian extremist groups such as Lashkar-e-Jhangvi will look on calmly as the Pakistani state constructs a massive link to the world’s preeminent Shia state? Given what we know about the Pakistani security establishment’s inability (or unwillingness) to respond to the LeJ attacks in Balochistan, it’s unlikely the LeJ would restrain itself from attacking pipeline workers and structures.

Then there’s Balochistan’s separatist insurgency. One of the grievances that fuels it is Islamabad’s mis-governance of the province’s natural resources. The circumstances are somewhat different with the pipeline (energy is to flow through Balochistan instead of being extracted directly from it). Yet the general context is the same; Balochistan will once again be a geographic linchpin of Pakistan’s energy security strategy. When Pakistan has executed this strategy in the past, bad things have happened in Balochistan—including attacks on energy facilities.

Still, let’s suspend our disbelief for a moment, and imagine that security isn’t an issue. A critical obstacle would still remain: Riyadh, arguably Islamabad’s most important ally, and Tehran’s chief regional rival.

We all know the story of Pakistan-Saudi ties. It features decades of military cooperation, ample largesse (between 2004 and 2009, only Washington provided more grant assistance), and a long geopolitical partnership (recall how during the height of the Arab Spring, several thousand former Pakistani servicemen deployed to Bahrain to help the Saudi-allied regime in Manama put down protests dominated by Bahrain’s Shia majority).

We’ve heard little about Riyadh’s views of the Pakistan-Iran pipeline. Suffice to say, they probably aren’t very sanguine. And Islamabad probably won’t take such views lightly; recent history demonstrates its determination to keep the Saudis conciliated.

In the summer of 2011, Islamabad and Tehran engaged in a flurry of diplomatic activity—culminating in a pledge to dramatically increase bilateral trade. Yet even as this was happening, Pakistan’s president and prime minister made separate trips to Riyadh. Ex-PM Yousaf Raza Gilani invoked soaring rhetoric about renewing “the bonds of brotherhood and fraternity” between the two allies. Several weeks later, Pakistan refused to accept Iran’s offer to help build the Pakistan side of the Pakistan-Iran pipeline.

Today, of course, this offer has been accepted—and Saudi Arabia, like America, is likely not pleased.

Why has Islamabad decided to go forward with the pipeline project now?

The optimistic explanation is that Pakistan’s leadership has decided to act boldly to safeguard the national interest—in effect seizing an opportunity to ease what has become one of the country’s most acute crises, regardless of any opposition from the Saudis or Americans.

I fear, however, that the proper explanation is purely political. With elections presumably just weeks away, the unpopular Pakistan People’s Party decided to finalise the pipeline agreement, knowing full well that the move would resonate with the energy-starved masses—and, as an added bonus, allow the PPP (a relatively pro-American party in an anti-American nation) to thumb its nose at Washington.

If such short-term political calculations are indeed what compelled the government to complete the deal, then more long-term—and politically unpalatable—concerns, such as the actual feasibility of the project, can simply be set aside.

Pakistan should be applauded for pursuing the pipeline project.

However, given the immense challenges of consummating it, Islamabad should simultaneously be pursuing other strategies—from energy trade with India to greater demand-side efficiency, and above all the consolidation of Pakistan’s chaotic array of energy-related institutions into a single ministry—with equal vigour.

 

[farhan_9909]

Because of energy crisis our export is struck since the past 4-5 years

each and every industry is working at less than 50% of the capacity

if we would not had energy crisis our export would be worth 40-50billions by now considering the fact that how much faster it was increasing under musharaf

 

[Marshmallow]

everyone!

 

[Secur]

Congratz first of all! ! But how are we going to pay for the gas? I mean Tehran been out of SWIFT. system for a long time. The Iranian president said that the pipeline can be extended to the North of Pakistan.

 

[M.harris]

 

[Xracer]

Iran-Pak pipeline: Still a Pipedream
Michael Kugelman
2 hours ago

So the pipeline is certainly a good idea. But is it a feasible idea? I fear not—and for reasons having little to do with US sanctions on Iran. DESIGN: JAMAL KHURSHID

It’s official; the Pakistan-Iran pipeline project will soon be underway.

Work is scheduled to begin on the Pakistan side today (Iran’s portion is nearly done), and is expected to be completed in less than two years.

Predictably, Washington is not pleased.

“We think that we provide and are providing the Pakistani government and people a better way to meet their energy needs,” a State Department spokesman recently declared.

That’s a questionable claim. US officials have been trumpeting their investments in hydropower projects, which are intended to generate more than 1,000 megawatts of power. Yet the pipeline is expected to provide more than 4,000 MW.

Indeed, from a pure supply/demand argument, the pipeline is a no-brainer. Pakistan is suffering through its worst gas shortage on record, and the nearly 22 million cubic meters of gas it promises to deliver to Pakistan daily could go a long way toward alleviating the country’s acute energy crisis.

So the pipeline is certainly a good idea. But is it a feasible idea? I fear not—and for reasons having little to do with US sanctions on Iran.

Many scoff at the idea of constructing the Turkmenistan-Afghanistan-Pakistan-Iran pipeline because of Afghanistan’s lack of security. Yet the same argument applies with its Pakistan-Iran counterpart. The Pakistan portion is expected to extend across nearly 800 kilometers, and will traverse Balochistan.

Is it realistic to expect that Balochistan-based Sunni sectarian extremist groups such as Lashkar-e-Jhangvi will look on calmly as the Pakistani state constructs a massive link to the world’s preeminent Shia state? Given what we know about the Pakistani security establishment’s inability (or unwillingness) to respond to the LeJ attacks in Balochistan, it’s unlikely the LeJ would restrain itself from attacking pipeline workers and structures.

Then there’s Balochistan’s separatist insurgency. One of the grievances that fuels it is Islamabad’s mis-governance of the province’s natural resources. The circumstances are somewhat different with the pipeline (energy is to flow through Balochistan instead of being extracted directly from it). Yet the general context is the same; Balochistan will once again be a geographic linchpin of Pakistan’s energy security strategy. When Pakistan has executed this strategy in the past, bad things have happened in Balochistan—including attacks on energy facilities.

Still, let’s suspend our disbelief for a moment, and imagine that security isn’t an issue. A critical obstacle would still remain: Riyadh, arguably Islamabad’s most important ally, and Tehran’s chief regional rival.

We all know the story of Pakistan-Saudi ties. It features decades of military cooperation, ample largesse (between 2004 and 2009, only Washington provided more grant assistance), and a long geopolitical partnership (recall how during the height of the Arab Spring, several thousand former Pakistani servicemen deployed to Bahrain to help the Saudi-allied regime in Manama put down protests dominated by Bahrain’s Shia majority).

We’ve heard little about Riyadh’s views of the Pakistan-Iran pipeline. Suffice to say, they probably aren’t very sanguine. And Islamabad probably won’t take such views lightly; recent history demonstrates its determination to keep the Saudis conciliated.

In the summer of 2011, Islamabad and Tehran engaged in a flurry of diplomatic activity—culminating in a pledge to dramatically increase bilateral trade. Yet even as this was happening, Pakistan’s president and prime minister made separate trips to Riyadh. Ex-PM Yousaf Raza Gilani invoked soaring rhetoric about renewing “the bonds of brotherhood and fraternity” between the two allies. Several weeks later, Pakistan refused to accept Iran’s offer to help build the Pakistan side of the Pakistan-Iran pipeline.

Today, of course, this offer has been accepted—and Saudi Arabia, like America, is likely not pleased.

Why has Islamabad decided to go forward with the pipeline project now?

The optimistic explanation is that Pakistan’s leadership has decided to act boldly to safeguard the national interest—in effect seizing an opportunity to ease what has become one of the country’s most acute crises, regardless of any opposition from the Saudis or Americans.

I fear, however, that the proper explanation is purely political. With elections presumably just weeks away, the unpopular Pakistan People’s Party decided to finalise the pipeline agreement, knowing full well that the move would resonate with the energy-starved masses—and, as an added bonus, allow the PPP (a relatively pro-American party in an anti-American nation) to thumb its nose at Washington.

If such short-term political calculations are indeed what compelled the government to complete the deal, then more long-term—and politically unpalatable—concerns, such as the actual feasibility of the project, can simply be set aside.

Pakistan should be applauded for pursuing the pipeline project.

However, given the immense challenges of consummating it, Islamabad should simultaneously be pursuing other strategies—from energy trade with India to greater demand-side efficiency, and above all the consolidation of Pakistan’s chaotic array of energy-related institutions into a single ministry—with equal vigour.

Michael Kugelman Writes with a sad Face

 

[Argus Panoptes]

The devils is in the details. What prices have been agreed to for the gas to be supplied through the pipeline, and are they affordable for Pakistan given the falling prices in the international market?

 

[Manticore]

Opinion Pipedream?

Dr Farrukh Saleem
Sunday, March 10, 2013

Capital suggestion



The good news is that the cost of the Pak-Iran gas pipeline has come down from $1.5 billion to $1.3 billion. The bad news is that neither Iran nor Pakistan has $1.3 billion. The good news is that President Zardari will be inaugurating the pipeline on Monday. The bad news is that a ‘pipedream’ is being inaugurated, not a pipeline.

There are two major prerequisites to building the pipeline: money and technology. There are two sources that have the money: Chinese banks and western financial institutions. There are two sources that have the required technology: Gazprom, the Moscow-based gas giant and western pipeline entities. On March 14, 2012, the Beijing-based Industrial and Commercial Bank of China Ltd (ICBC) backed out of a deal to finance the Pak-Iran gas pipeline. On May 14, 2012, Gazprom, the largest extractor of natural gas in the world, pulled out of the Pak-Iran pipeline project.

No money, no technology. All politics. Lately, the Americans seem to be ditching our president and our president is out with a double-edged sword: annoy the Americans and when the project actually fails the next rulers in Islamabad can be conveniently held responsible for the failure.

The Iranians are completely isolated and are therefore playing along pretending that they are still interacting with other countries of the world. On February 6, 2012, Iran defaulted on payments for wheat imports from Ukraine. On February 7, 2012, Iran defaulted on payments worth $144 million for rice shipments from India. Conclusion: Iran has no hard currency left in its reserves.

The good news is that Iran is desperate to deal with Pakistan. The bad news is that South Pars gas field’s reserves are yet to be ratified by a third party. The good news is that Sui Northern and Sui Southern are charging us around $3.50 per unit of gas. The bad news is that Iranian gas price is pegged to the price of crude and at the current level Pakistani consumers would have to cough out around $13 per unit of Iranian gas. More recently, Pakistan has asked Iran to revise the price of gas downwards from 78 percent of crude to 70 percent of crude (Iran has refused to renegotiate the price downwards).

On December22, 2011, the National Bank of Pakistan (NBP), responsible for raising the rupee component of the project, informed the Economic Coordination Committee’s (ECC) Steering Committee on Iran-Pakistan (IP) Pipeline that it had “branches in different countries of the world and therefore it feared that these branches could be closed due to US sanctions.” Subsequently, the NBP pulled out of the project.

In December 2011, the Oil and Gas Development Company Limited (OGDCL) “already cash constrained due to the circular debt, said that its US investors had threatened to retreat if the company financed the IP gas pipeline project.” Subsequently, OGDCL pulled out of the project.

The other good news is that our second-largest source of grant assistance is Saudi Arabia (America is the largest). The other bad news is that al-Mamlakah al-’Arabiyyah as-Su’udiyyah does not want Pakistan to trade with Iran.

Our pipedream fantasy; End tragedy solve the riddle; And dissipate ideals of indecision pipe; Pipedreams like these will; Cease and die unleashed.



The writer is a columnist based in Islamabad. Email: farrukh15@hotmail.com. Twitter: @Saleemfarrukh

 

[Xracer]

Congratulation PAK Nation At last we have Done it

 

[Argus Panoptes]

The devils is in the details. What prices have been agreed to for the gas to be supplied through the pipeline, and are they affordable for Pakistan given the falling prices in the international market?

The following quote is important:

Opinion Pipedream?

Dr Farrukh Saleem
Sunday, March 10, 2013

................. The good news is that Sui Northern and Sui Southern are charging us around $3.50 per unit of gas. The bad news is that Iranian gas price is pegged to the price of crude and at the current level Pakistani consumers would have to cough out around $13 per unit of Iranian gas. More recently, Pakistan has asked Iran to revise the price of gas downwards from 78 percent of crude to 70 percent of crude (Iran has refused to renegotiate the price downwards).

A rise in price by nearly 4 times is simply unaffordable, and will become even more so if crude oil prices rise further, which they are likely to. Plus, consider that the prices of gas in the international market are falling sharply due to a glut of supply.

The article is correct: All politics, no real benefit.

 

[muse]

Thus far most Pakistanis have yet to awaken to the shape given to the near future and why this pipeline and Gwadar are vitas to Pakistan's relevance as a state and as a source of stability and engine of prosperity - most Pakistanis are beginning to awaken to the opposition of the US as expressed by Arabia primarily and the Gulf states, below is a piece that may allow them to develop a deeper understanding of the issues:


Central Asia's ECO wants
energy ties, just not on oil, gas
By Chris Cook

Under the calm surface of the formal protocols and the stylized prose of the Tehran Declaration which emerged on March 6 at the Third Energy Ministerial Meeting of the 10-member Economic Co-operation Organization of Central Asian states, there were some interesting under-currents. [1]

Firstly, there was the fact that the meeting took place at all, after being postponed last October, and even more remarkably, that all of the ECO nations - the Central Asia states plus Afghanistan Azerbaijan, Iran, Pakistan, and Turkey - were represented, including even Turkmenistan. That being the case, the chair was taken by the powerful Iranian Oil Minister Rostam Qasemi, rather than his more junior colleague, Iran's Minister for Power.


Energy co-operation
The principal theme of the meeting was ECO energy co-operation, and it rapidly became clear that there was no appetite at all for Iran's proposal for an ECO Energy Charter.

Now, that concept was my idea in the first place, but unfortunately those oil ministry officials who advanced the proposal did not and do not understand the concept and presented a fundamentally flawed document. Worse than that, the fact that this strategic energy policy framework was named the ECO Energy Charter led to exactly the confusion with the Energy Charter Treaty and Organization which I suggested should be avoided by using the term ECO Energy Accord instead.

So the cool reception should have come as no surprise: but fortunately, all was not lost.

Natural grid
The basis of my ECO Energy Accord proposal was that the ECO nations should take steps towards the Danish approach to strategic energy policy, which has seen Danish GDP increase by 78% since 1980, while energy use has remained flat, and their carbon fuel use, remarkably, actually declined.

The Danes mandate the least possible use of carbon fuels for a given output of electricity, heat or power, and this has led to massive investment in renewable energy, and in decentralized community level combined heat and power schemes, heat storage, and other infrastructure.

I describe the resulting ''least energy cost'' decentralized architecture for energy production and transmission as a ''Natural Grid'', as distinct from the centralized ''least dollar cost'' national grid energy networks and centralized production that have led to over-dependence on cheap carbon fuels and increasing energy insecurity in consumer nations.

It is therefore interesting to be able to report that despite the absence of agreement in respect of co-operation covering oil and gas production there was - unusually - complete agreement among the ECO nations in respect of energy co-operation covering power production and transmission generally, and a focus on gas-fired power production specifically.

Moreover, and again completely consistent with the policy I advocate, there was agreement in respect of the need for co-operation in respect of massive ECO investment in energy efficiency.

The same systemic issues and structural problems which afflict investment in oil and gas infrastructure are even worse in the fields of renewable energy and energy efficiency. It was also agreed that the level of subsidies in ECO nations, particularly in ECO producer nations, has become unsustainable.

That being so, one of the subjects for urgent study by the ECO Secretariat will be the development of suitable frameworks for investment and financial instruments which facilitate both investment on the one hand, and the reduction of subsidies on the other.

The result of this wave of agreement was therefore that a major embarrassment was averted for the hosts, and that ECO can look forward to some truly meaningful energy co-operation in the next 10 years.

Note:
1. ECO member states are Afghanistan, Azerbaijan, Iran, Kazakhstan, Kyrgyzstan, Pakistan, Tajikistan, Turkey, Turkmenistan and Uzbekistan.

Chris Cook is a former director of the International Petroleum Exchange. He is now a strategic market consultant, entrepreneur and commentator.

 

[Green Angel]

Pakistan Zindabad..............

 

[Grim Reaper]

Pakistan is a weak country and will soon give into US demands

 

[Rana4pak]

Pakistan is a weak country and will soon give into US demands

isreal is not a country and will soon give into muslim hands