Pakistan, Iran sign gas pipeline agreement

[Interceptor]

Pakistan, Iran sign gas pipeline agreement



ISLAMABAD/TEHRAN: Iran and Pakistan formally signed an export deal on Sunday, which stipulates that Iran would begin supplying natural gas to Pakistan from 2014.

The landmark agreement was signed in Tehran by Iran’s deputy oil minister Javad Ouji and a Pakistani delegation that included Kamran Lashari, secretary for the Ministry of Petroleum and Natural Resources, and Naeem Sharafat, managing director of the Inter-State Gas Company.

“Now, the project has entered the implementation phase and there are no further formalities left in its way,” Sharafat told APP.

Iran has already constructed 907 kilometres of the pipeline between Asalooyeh, in southern Iran, and Iranshahr.

Lashari said that Islamabad would conduct a one-year feasibility study for building its section of the pipeline. It will then “take three years to construct the 700-kilometre pipeline” from the Iranian border to Nawabshah, he added.

The volume of imported gas will be about 20 percent of Pakistan’s current gas production, and the agreement is for a period of 25 years, renewable for another five years. The pipeline was originally planned between Iran, Pakistan and India, but the latter pulled out of the project last year. agencies


Daily Times - Leading News Resource of Pakistan

[Zaki]

finally all done...... and i am surprised to see that 907KM of this pipeline has already been completed. The supply was supposed to began in 2015 and now every news reporting it will start in 2014. Seems like they have accelerated the construction work or Iran is willing to complete her part of this pipeline as soon as possible

[Neo]

Gas project not to affect ties with US: Naveed

ISLAMABAD (June 14 2010): Federal Minister for Petroleum and Natural Resources Syed Naveed Qamar on Sunday said Pakistan and Iran have signed gas pipeline project on Sunday and it would not affect Pakistan-United States relations. Talking to a private news channel, he said the Pakistan People's Party (PPP) government signed the agreement, which would go a long way in meeting the energy needs.

The minister said that this gas would be used for power generation in the country and it was utmost requirement of the country to overcome energy crisis, he added.

Business Recorder [Pakistan's First Financial Daily]

[Neo]

Pakistan seals pipeline deal with Iran

By Syed Fazl-e-Haider

KARACHI - Iran has finalized a US$7 billion gas pipeline deal to export natural gas to Pakistan. The two countries on Sunday formally signed an export contract that commits the Islamic republic to supplying its eastern neighbor with natural gas from 2014.

The Iran-Pakistan (IP) pipeline, which has been talked about for 17 years, will connect Iran's South Pars gas field with Pakistan's southern Balochistan and Sindh provinces and will be crucial in Pakistan's attempts to ease countrywide electricity shortages.

The deal was signed days after a UN Security Council voted to tighten sanctions against Iran, but Islamabad believes that these will not affect the pipeline project.

"As far as our ... project is concerned, it is a commercial agreement to meet our energy deficit and beyond the purview of this resolution,'' Dawn newspaper reported Abdul Basit, Foreign Office spokesman as saying.

The United States has sought to dissuade Pakistan and India, which has also considered joining the project, because of Tehran's nuclear ambitions.

"We have advised Pakistan to seek other alternatives,” Dawn quoted Robert Blake, the US Assistant Secretary of State for South and Central Asian affairs as saying in April. "We do not think it is the right time for doing this kind of transaction (building the pipeline) with Iran."

Iran, which has the world's second-largest gas reserves after Russia, needs around $25 billion a year in oil and gas industry investment, according to Reuters. Its gas production capacity of 600 million cubic meters per day is expected to rise to 1.1 billion cubic meters by 2015, but sanctions by the West, political turmoil and construction delays have slowed its development as an exporter.

US Defense Secretary Robert Gates reportedly said before the UN sanctions vote last week that the UN resolution could clear a way for individual states and the European Union to block foreign firms expanding Tehran's oil and gas exports and impose other curbs on business activity.

The pipeline will provide gas to the power sector to generate about 5,000 megawatts of electricity, Some analysts say it will not be possible for the government to provide the fuel to domestic consumers due to its high price, which was one reason behind India's withdrawal from the project.

Pakistan's Deputy Energy Minister Kamran Lashari, who was present at the signing ceremony, said Islamabad will conduct a one-year feasibility study for building its section of the pipeline, local media reported. Iran has built 907 kilometers of the pipeline between Asalooyeh, in southern Iran, and Iranshahr. Iran's Deputy Oil Minister Javad Ouji reportedly said that Iran this week will start building the next 300km stretch to the Pakistani border, through the Iranian port of Chabahar. Pakistan will take three years to build the 700km link from the Iranian border to Nawabshah, in Sindh province.

"This is a happy day," Ouji said at the contract signing ceremony in Tehran, Agence France-Press reported. "After decades of negotiations, we are witnessing today the execution of the agreement ... to export more than 21 million cubic meters of natural gas daily from 2014 to Pakistan."

On May 28, the two countries signed the sovereign guarantee agreement, which makes effective made Gas Sales Purchase Agreement (GSPA) signed by the countries last year in Istanbul. Under the GSPA, Iran agreed to export 750 million cubic feet per day (mmcfd) with a provision to increase it to one billion cubic feet a day (bcfd) at the rate equal to 78% of crude oil for the next 25 years.

The pipeline was originally planned to extend from Pakistan to India in 1993. India walked away from the project last year, but has kept its options open to join at a later stage. After India's withdrawal, Beijing has shown interest in building a pipeline through Pakistan carrying Iranian gas to China. China's National Petroleum Corporation is already involved in developing the South Pars field.

Pakistan's demand for gas, which is the primary fuel helping run the economy, has surged to 4.7 billion cubic feet a day (bcfd) against actual supply of 3.6 bcfd. The country's natural gas reserves, which meet over 50% of its requirement for energy, have depleted rapidly in recent years with few hydrocarbon discoveries and decline in production from its largest Sui gas field in Balochistan.

Asia Times Online :: South Asia news, business and economy from India and Pakistan

[Neo]

India out of 'peace pipeline' as Iran, Pakistan seal gas deal

IANS, Jun 14, 2010

TEHRAN/NEW DELHI: Iran has formally signed a $7.6-billion cross-border pipeline deal to supply 750 million cubic feet of natural gas daily to Pakistan from mid-2014, ignoring India that was part of the original plan conceived in the 1990s.

The pipeline will connect Iran's giant South Pars gas fields with Pakistan's restive Balochistan province in the southwest and Sindh in the south. Once the gas starts flowing in, it will account for 20 percent of Pakistan's needs, IRNA reported.

"We explicitly announce that as a country having huge gas reserves, Iran will play a key role in guaranteeing global energy security in the future," Oil Minister Masood Mir-Kazemi was quoted as saying by the official agency after the deal was inked in Tehran.

Iran has already laid around 900 km out of the 1,000 km of the pipeline envisaged on its territory. Now, Pakistan will have to construct about 700 km from the border to its gas transmission network at Nawabshah, near Karachi, at a cost of $1.65 billion, officials said.

There is also a provision to raise the level of import to as much as 1 billion cubic feet of gas per day during the 25-year validity of the pact, which can be extended by another five years.

"Now the project has entered into the implementation phase and there are no further formalities left in the way," said Naeem Sharafat, managing director of Pakistan's Inter-State Gas Co who was part of his country's delegation.

The original plan, however, was different, with India keen to secure supplies from Iran, which boasts the second largest reserves of natural gas in the world after Russia.

In the mid-1990s, Tehran and New Delhi had inked preliminary pacts to transport gas to India through Pakistan. The proposal was then called "peace pipeline' to showcase to the world good neighbourly relations between India and Pakistan.

But India remained concerned about three aspects, preventing meaningful progress of the deal.

The first was the price of gas, the second was Islamabad's reluctance to guarantee the safety of the pipeline in its territory and the high transit fee Pakistan demanded.

India, so far, has not said formally that it had withdrawn from the project. Petroleum Minister Murli Deora had, in April, even proposed a trilateral meeting in the Iranian capital to take the talks further.

He also met Iran's Deputy Minister for International Affairs Noghrehkar Shirazi on the sidelines of the 12th International Energy Forum at Cancun proposing such talks.

But Iran's state-run agency has been reporting that New Delhi had, indeed, withdrawn from the project last year. The agency, however, said that Iran remained warm to welcoming India should it wish to join the project later.

India out of 'peace pipeline' as Iran, Pakistan seal gas deal - India - The Times of India

[Neo]

IP deal to strengthen Pak-Iran ties

ARTICLE (June 18 2010): Sunday, June 13, 2010, was red letter day for all of us, as after decades of negotiations, Pakistan and Iran reached a final deal by signing an export agreement, which stipulates that the Islamic Republic of Iran would begin supplying more than 21 million cubic meters (742 million cubic feet) natural gas from 2014. There is at last a long-term solution to our power generation problem.

The multi-billion-dollar Iran-Pakistan (IP) gas pipeline project will enable the two sides to kick off physical work on the project. According to reports, work on 900-km of the project in Iranian territory had been completed, whereas the work on 250-km would be completed soon.

Good to the present government, which has done the deal despite many pressures. This was long overdue as it was not the trade and industry of the country alone that were suffering badly due to acute energy, but the people at large had also faced a very difficult scenario. Consensus on the 7th NFC award, launching of austerity drive, cut in salaries of both federal and provincial ministers and freezing of non-development expenditures are the steps that have won many hearts because these measures would go a long way in mitigating the sufferings of people.

Had these measures been taken a few years back, the situation would have been quite encouraging today. As I know for sure that Pakistan has no other issues than that of governance. Since ages, it has been facing the issue of implementation of policies. All the time good policies are framed sans any mechanism to ensure their implementation.

Coming back to the gas line project, the government would have to deal the project at hand very professionally to ensure its on-time completion. It is necessary for the government to constitute a team of technical experts to carve out a mechanism to get its feasibility done and to arrange funding for the multi-billion dollar project.

If these measures are not taken, there are little chances of completion of this project in stipulated time. The GSPA on IP gas pipeline project was signed on June 5, 2009 in Istanbul, Turkey - in a third country to be governed by French law, thereby denying any advantage to Iran or Pakistan in case of any dispute. Under the GSPA, Iran will export 742 mmcfd to one bcfd gas to Pakistan at the rate equal to 78 percent of crude oil for the next 25 years, which would help generate 4000 to 5000 MW electricity.

The US, to prevent the gas deal with Iran, had told Pakistan that it would look after its energy needs, but has done nothing practical. This has left Pakistan, facing a permanent energy shortfall, with no option but to pursue the Iranian gas deal. With the project to start with a 900-km pipeline between Asalooyeh and Iranshehr near the Pakistan border, it is scheduled for completion in four years, but the Iranians reportedly have promised that they will complete it in two and a half to three years.

However, even if the project comes online on schedule, it will still mean Pakistan's present electricity shortage will be considerably eased, as Iranian gas goes to fuel turbines that would otherwise need fuel. The Iranian gas would go to the electricity sector, and thus local gas production would go for domestic use. There would be considerable savings, resulting from this, when compared with other projects, and thus the project is viable as it is.

However, the project is still open to India's joining, which would only require a pipeline to Pakistan. If India gets permission from the US, it will be required to make a transit payment agreement with Pakistan, in addition to an agreement with Iran on the price of the gas.

The capital cost for the Pakistan section has been estimated at $1.65 billion, planned to be funded under public-private partnership. Now I want to share my thoughts on the value-added tax (VAT). I am not against the implementation of the VAT as I have always been an advocate of documented economy. But I want to convey to all those, who are at the helm, that the stakeholders should be taken into confidence.

As without due consultation, it would be near to impossible for the government to implement proposed VAT. If one looks at the world economies, he or she would find that almost all the countries in the world took considerable time to implement VAT. During my meetings with almost all top bureaucrats in the country, I have tried my level best to convince them to put off this issue for a longer period as the three-month time given by the Federal Finance Minister is not sufficient for both the department concerned and the private sector.

Secondly, the present government should concentrate on strengthening of agriculture sector which is the backbone of the country's economy, but unfortunately there is a big miss in the federal budget for the year 2010-11 as far as agriculture sector is concerned. Neither the issue of water shortage was touched in a proper manner in the budget speech nor any attention was given towards enhancing the agriculture yield. A little attention towards agriculture sector could help solve both the water shortage issue and the problem of low agriculture yield.

(The writer is the Vice President of SAARC Chamber of Commerce & Industry.)

Business Recorder [Pakistan's First Financial Daily]

[Neo]

US has no concern over IP gas deal: Holbrooke

ISLAMABAD (June 20 2010): The United States has no concern on Iran-Pakistan Gas Pipeline as Pakistan is an independent country and the project is its own decision, US Special Representative for Afghanistan and Pakistan Ambassador Richard Holbrooke said here on Saturday. Holbrooke told a joint news conference with Foreign Minister Shah Mehmood Qureshi that work is going on regarding Reconstruction Opportunity Zones (ROZs).

He said efforts are being made for more market access for Pakistan. He especially motioned the possibility of opening up market for Pakistani mangoes to America and said these mangoes were of very high quality and taste. He assured to extend more financial help to Pakistan in energy, education, health, war against terror, water and other important sectors especially to find permanent solution to the loadshedding.

Al Qaeda's network had been "severely degraded" by joint US-Pakistani efforts, the US special envoy said. "The al Qaeda network has been severely degraded in recent years in efforts that both our countries work on." Asked whom he would hold responsible if al Qaeda leader Osama bin Laden and the Afghan Taliban chief, Mullah Mohammad Omar, were hiding somewhere along the border between Pakistan and Afghanistan, Holbrooke demurred.

"Many of their associates have been apprehended or killed. Even those two people ... are still at large but they are under intense pressure," he said. Holbrooke praised Pakistan's sacrifices in the fight against militants on its soil and said he hoped more would be achieved.

"In regard to the war itself, Pakistan has made progress, but it doesn't mean that we've reached the end of the road. This is a tough, long struggle and much more needs to be done," he said. Foreign Minister Shah Mahmood Qureshi said, "We have tried to learn from the lessons of the past and tried to overcome the deficiencies and lack of follow-up of dialogue in the past."

The minister said the present sectoral meetings between Pakistan and US on different sectors in this new arrangements have constituted steering committee and adopted proper follow-up mechanism. Qureshi said these ministerial meetings remained very successful and in the dialogue has broaden the areas of interaction.

He said there are 11 tracks under discussion and some of them have completed their review process while meetings on the remaining sectors will be completed by July 9. He said main purpose of these sectoral meetings was to have interaction with counterpart to understand challenges Pakistan has in these areas.

Qureshi said: "We are not focusing on five years of co-operation under Kerry Lugar Bill assistance, but we are looking beyond these five years period." He said, "We have good round of meetings in the seven sectoral meetings held so far." He especially mentioned the successful round of meeting on defence co-operation held for three years.

The minister said there has been very good meeting on agriculture sector that especially discussed water issues. Qureshi said all these sectoral meetings will be completed before the visit of Secretary of State Hillary Clinton in July 2010. He said, "We have good round of discussion, discussed bilateral issues, situation in Afghanistan, and took stock of the extensive round of follow-up meetings on strategic dialogue.

Business Recorder [Pakistan's First Financial Daily]

[Neo]

Holbrooke changes his stance on IP deal

ISLAMABAD (June 21 2010): Pakistan should be wary of committing to an Iran-Pakistan gas pipeline because anticipated US sanctions on Iran could hit Pakistani companies, the US special representative to the region said on Sunday. (On Saturday, Holbrooke said that his country has no concern over the gas deal between Iran and Pakistan).

While sympathetic to Pakistan's energy needs, the US special representative to the region, Richard Holbrooke, told reporters that new legislation, which targets Iran's energy sector, is being drafted in the US Congress and that Pakistan should "wait and see".

"Pakistan has an obvious, major energy problem and we are sympathetic to that, but in regards to a specific project, legislation is being prepared that may apply to the project," he said, referring to the pipeline. "We caution the Pakistanis not to over-commit themselves until we know the legislation."

Pakistan is plagued by chronic electricity shortages that have led to mass demonstrations and battered the politically shaky government of President Asif Ali Zardari.

US Senator Joseph Lieberman said last week he expects Congress to finish shortly legislation tightening US sanctions on Iran that will include provisions affecting the supply of refined petroleum products to Tehran, and add to sanctions on its financial sector.

Lieberman, an independent, is a member of a House-Senate committee of negotiators working on final details of the bill and said it could pass by July 4.

The $7.6 billion natural gas pipeline deal, signed in March, doesn't directly deal with refined petroleum products and was hailed in both Iran and Pakistan as highly beneficial.

The US has so far been muted in its criticism of the deal, balancing its need to support Pakistan, a vital but unstable ally in the global war against al Qaeda, with its desire to isolate Iran. But the legislation could be comprehensive enough to have major implications for Pakistani companies, Holbrooke said.

"We caution Pakistan to wait and see what the legislation is." This was Holbrooke's tenth trip to Pakistan since President Barack Obama appointed him special representative to the region. His visit followed a series of working groups this week that are part of the US-Pakistan strategic dialogue, which both countries say will lay the groundwork for a new relationship.

Afghanistan was on the agenda in meetings with the Pakistani leadership, Holbrooke said, including talks on a Pakistani role in talks between the Afghan Taliban and the Kabul government.

But the United States would not support Pakistan pushing the Haqqani network, one of the strongest factions of the Afghan insurgency and mostly based in Pakistan's North Waziristan, into talks with Kabul as Washington sees the group as intransigent, brutal and too tightly allied with al Qaeda.

The United States has said any groups wishing to lay down their weapons must renounced al Qaeda and agree to participate peacefully in the Afghan political process. "It's just hard to see that happening," Holbrooke said of the Haqqani network.

Regardless of what happens in Afghanistan, he said, the United States would remain engaged with Pakistan.

"Pakistan matters in and of itself. Whatever happens in Afghanistan, the US cannot turn away from Pakistan again," he said. "We are not going to repeat the mistakes that occurred - at least not on our watch - of the last 20 years."

Business Recorder [Pakistan's First Financial Daily]

[sonicboom]

Pakistan Ignores US On Iran Gas Deal

June 21, 2010

Pakistan’s Foreign Minister says his country needs energy, emphasizing that Islamabad will continue a gas pipeline deal with Iran despite the American concerns and sanctions on Tehran.

Shah Mehmood Qureshi told reporters on Sunday that the present government has struck the gas pipeline deal with Iran in view of Pakistan’s energy requirements.

“This agreement is in the interest of Pakistan and it will only see its interests and the international laws…… the Iran-Pakistan gas pipeline agreement will not come under the ambit of the sanctions on Tehran,” he said, a Press TV correspondent reported.

Pakistan’s Foreign Minister disclosed that all the different phases of the gas pipeline agreement have been finalized and Islamabad wants it to proceed as planned.

On Sunday, Tehran and Islamabad finished signing a multi-billion-dollar contract, which supplies Pakistan with Iranian natural gas from 2014.

That same day, the US special envoy to Pakistan and Afghanistan, Richard Holbrooke, warned Islamabad that a recently signed gas pipeline deal with Iran could run afoul of new sanctions being finalized in the US Congress.

“We cautioned the Pakistanis to try to see what the (Congressional) legislation is, before deciding how to proceed because it would be a disaster if … we had a situation develop where an agreement was reached which then triggered something under the law,” he said.

Under the $7.6 billion deal, the Islamic Republic has agreed to provide 50 million cubic feet of natural gas to Pakistan on a daily basis from mid-2014.

The pipeline will account for 20 percent of the recipient’s demands once Iran’s giant South Pars gas field is connected with Pakistan’s Baluchistan province.

Iran has already constructed more than 900 kilometers of the pipeline, stating that as a country with huge gas reserves, it is capable of guaranteeing global energy security.

The project, which aims to transport gas from Iran to Pakistan through a 2,600-kilometer pipeline, was first advanced in 1994 but has been stalled by a series of disputes between Pakistan and India.

Pakistan Ignores US On Iran Gas Deal | Pakistan Ka Khuda Hafiz

[Neo]

Pakistan not bound by US sanctions on Iran: Gilani

* Prime minister says Islamabad will reconsider gas deal if it violates UN sanctions
* Parliament has come up to the expectations of masses
* Certain elements want conflict between govt and judiciary but all such attempts will fail

ISLAMABAD: Pakistan is not bound to follow the restrictions that the US has imposed on Iran but will reconsider the Iran-Pakistan gas pipeline project if sanctions are levied by the UN, Prime Minister Yousaf Raza Gilani said on Tuesday.

Speaking at a luncheon attended by parliamentarians, Gilani said, “As far as the US is concerned, we are not bound to follow these [sanctions], but if these are put in place by the United Nations, we will consider them under the obligation of international laws.”

He was clarifying comments he had made on Monday about the impact of new sanctions imposed on Iran.

Gilani said all state institutions needed to work within their constitutional ambit for achieving the greater good, for serving the masses and in the larger interest of the country.

The prime minister said the government had never claimed that there were no problems or it had solution to all ills, but that it was learning from experience and its mistakes.

Expectations: He expressed satisfaction at the performance of parliament and said it had come up to the expectations of the people of Pakistan. He said supremacy of parliament needed to be ensured.

Conflict: He said certain elements wanted a conflict between the government and the judiciary but said all such attempts would fail.

Dispelling such impressions, the prime minister said his government enjoyed good ties with all state institutions, adding that the judiciary was trying to bring about social justice in the society.

Gilani said his government was following all rules and regulations in letter and spirit had nothing to hide. “We are lawmakers, not law breakers,” he said.

He said the government enjoyed cordial relations with the opposition, the media and all other pillars of the state and believed that the country could progress and move forward by adhering to the policy of reconciliation and consensus.

He said the government had responded forcefully when its writ was challenged by extremists in Swat and Malakand. Gilani said with support from all political forces in the country, the government had forged a strong policy against terrorism.

He said the recent budget by the federal and the provincial governments had been prepared in difficult circumstances but keeping in view the global economic condition and the ground situation. He said efforts were being made to maintain the pace of national progress.

He hoped that the parliamentarians would continue to guide the government on issues of good governance and legislation.

The prime minister mentioned the achievements of his governments that included the 7th National Finance Commission Award, the passage of the 18th Amendment to restore the constitution to its original form, the Benazir Income Support Programme, the Aghaz-e-haqooq-e-Balochistan package and the Gilgit-Baltistan empowerment package.

Daily Times - Leading News Resource of Pakistan