Pakistan and Iran: Pipelines or pipe dreams? (REPORT)

By Kamal Hyder

(PHOTO: Daily Times of Pakistan)

Two weeks ago, the leaders of Iran, Afghanistan and Pakistan met in Islamabad for the third round of a periodically held trilateral summit.

Iran and Afghanistan, however, have as much to discuss with Pakistan regarding those countries’ bilateral relationships with Islamabad as they do with each other.

As such, Hamid Karzai, the Afghan prime minister, and Mahmoud Ahmadinejad, the Iranian president, held separate bilateral meetings on the sidelines of the larger summit with their Pakistani counterparts, Prime Minister Yousuf Raza Gilani and President Asif Zardari.

Afghanistan’s concerns were fairly straightforward: with the United States seeking an honourable exit from the war in Afghanistan, and the impending talks with the Taliban set to take place in Qatar facilitating such a move, Karzai was concerned about the fate of his fragile government, and the role Pakistan would play to stabilise or destablise his country. 

Ahmadinejad, meanwhile, took the stance of blaming regional turmoil on external influences, a thinly veiled dig at the United States. Faced with the prospect of ever-tightening sanctions against his country from the US and the European Union, Ahmadinejad wanted guarantees from Pakistan that a gas pipeline deal that has been in the works for several years will not now become victim to US sanctions.

This deal has already been subject to opposition from the US, of course, Initially, the pipeline was to run from Iran, through Pakistan, into India – making it the Iran-Pakistan-India (IPI) pipeline. The Indian government, however, pulled out in 2008, after the United States stepped in and promised the country it would offer it entrance into the club of nations allowed to trade in civilian nuclear technology, in order to meet India’s ever-growing energy demands.

In exchange, Delhi was asked to drop its plans to co-operate economically with Iran.

At the time, Pakistan demanded that the US offer it the same deal. Washington refused, suggesting instead that Pakistan modify the IPI plan and use Turkmenistan as its natural gas source – creating the Turkmenistan-Afghanistan-Pakistan-India (TAPI) project. Given the unstable security situation in Afghanistan, however, that plan never took off, and Pakistan instead signed a nuclear energy co-operation deal with China.

Iran pipeline challenges

Security challenges, however, are not limited to Afghanistan. If an Iran-Pakistan pipeline is to be built, it will pass through Pakistan’s restive Balochistan province. Nationalists in that province are fighting for an independent homeland, and Islamabad alleges that they are doing so with Indian support.

The Balochistan issue is a touchy topic with Pakistan, and US-Pakistan relations have been rattled in recent days by the passage of a non-binding resolution in the US House of Representatives condemning a Pakistani crackdown on what the state calls "insurgents" in that area.

Balochistan, then, is a stick the US can use to beat Pakistan within the public sphere, were it to move forward on any pipeline deal.

Regardless, Pakistan has assured Iran that it will indeed move forward on its proposed pipelines, no matter what the obstacles are. Iran has also proposed barter deals with Pakistan to buy a million tons of wheat and 200,000 tons of sugar in exchange for fertiliser and iron ore. It has also offered to provide Pakistan with 80,000 barrels of crude oil on a deferred payment basis, and aid in laying the pipeline required to transport said oil.

The US, meanwhile, has warned that the pipeline deal is in direct violation of its latest round of sanctions against Tehran, and could prompt sanctions on Pakistan.

With Pakistan’s economy already precariously balanced between massive external debts and struggling industries, any new sanctions could push it over the edge.

The seriousness of the threat of sanctions prompted Pakistan’s political and military leadership to head into a crisis meeting, reassessing the country’s options.

Pakistan already buys the bulk of her oil from countries in the Gulf, particularly from key ally

Saudi Arabia. As such, it would appear that the country’s relations with those countries, as well as the threat of sanctions from the United States, would be enough to  convince it to hold off on the deal with Iran.

Despite the tough talk, then, it would appear that for now at least, the pipeline deal is more of a pipe dream.

- Originally published by AlJazeera under Creative Commons License