By Blanche, Ed
The Middle East , No. 393
Gas Pipeline Construction--Planning
Gas Pipeline Construction--International Aspects
United States Foreign Relations--Economic Aspects
United States Foreign Relations--Political Aspects
Natural Gas Reserves--Iran
Natural Gas Reserves--Access Control
Natural Gas Reserves--International Aspects
PAKISTAN AND INDIA have been moving closer to building a pipeline from Iran that will provide the two energy-starved Asian giants with up to 30m cubic metres of natural gas a day. On 25 April, the petroleum ministers of the two Asian states agreed on the structure of a joint company to construct what their nations, frequently at odds since they were created out of the British Raj in 1947, call the "peace pipeline".
But the United States opposes the ambitious project because it will allow Iran to break free of US-led efforts to isolate it at a time when Tehran is pushing to become the paramount power in the region. The Americans are seeking to wreck the pipeline plan, arguing that the billions of dollars it could earn the Islamic Republic might be used to finance its highly controversial nuclear weapons programme.
The planned 2,600km Iran-Pakistan-India (IPI) pipeline, which would deliver gas from one of America's main foes to two of its' strategic allies in the war against terror, is becoming a political timebomb and 2008 could be a make-or-break year for the energy project likely to impact heavily on the Gulf region.
The irony is that India and Pakistan are already nuclear powers themselves and that Pakistan may even have helped Iran gets its nuclear programme off the ground. Just to compound that irony, the Americans even have a 2006 deal with India to support its civil nuclear energy programme--and are using that to pressure New Delhi into dumping the IPI project.
However, political upheaval in Pakistan and growing anger against the US along with leftist-led opposition in India could help boost prospects for the pipeline plan, and add weight to Iran's ambition to become the region's leading power. The Americans fear that the "peace pipeline" will help create a new bloc in South Asia that could challenge US geo-strategic interests in the Gulf.
Iranian President Mahmoud Ahmadinejad, Washington's bete noire, visited Pakistan in April and then flew to New Delhi (incensing the Americans) seeking to accelerate the pipeline project.
Iran has 15.7% of the world's natural gas reserves, second only to Russia although its current share of the global gas market is negligible, due in part to US sanctions and a lack of foreign investment. Tehran plans to crank up its gas exports via pipelines to 303.6m cubic metres a day by 2025, from the current level of around 18m cubic metres.
Tehran has just about completed its stretch of the 48-inch diameter pipeline, testimony to its impatience to get the project up and running. It would go ahead with Pakistan even if India falls out. India has been the most vacillating of the three potential partners, blowing hot and cold about the project since it was first mooted in 1989 over the cost and the risk of having to depend on its old enemy Pakistan for strategic supplies of badly needed energy.
Pakistan has yet to begin work on its 1,000km portion and the required infrastructure. India needs to build 600km of pipeline. But all the parties have at various times used the project as a political tool.
According to US analyst Kaveh L. Afrasiabi, a specialist on Iran, the IPI pipeline "has the potential more than any other existing Iranian project to extend the scope of Iran's 'pan-regional' approach, by organically connecting Iran to the sub-continent on a long-term basis and providing a new Iran-Pakistan-India nexus that could in turn be used for addressing what is lacking so far, that is, more than paltry interregional trade."
Iran, he observes, "is in many ways an ideal connecting bridge that has not until now fully exploited its advantageous equidistance from India and Europe. Straddled between the two energy hubs of the Persian Gulf and the Caspian Sea, Iran is a suitable conduit for trade, energy and non-energy, between the Arab states of the Persian Gulf, which are members of the Gulf Cooperation Council. …