US opposition to the gas pipeline
By Afzaal Mahmood
DESPITE considerable progress at the recent New Delhi meeting between the petroleum secretaries of Pakistan and India, the Iranian gas project continues to be plagued by uncertainty. The reason for scepticism is that Washington continues to strongly oppose any collaboration by Islamabad and New Delhi with Tehran on the energy front.
The joint statement, issued in New Delhi, after two days of talks on December 16 and 17, says that Pakistan and India have agreed to give final shape to the project structure and framework of the Iran-Pakistan-India (IPI) gas pipeline by April 2006. A tripartite meeting of three joint working groups “may be held” early next year in Tehran to discuss issues such as an integrated feasibility study, project structure and a tripartite framework agreement.
At a joint press conference, the petroleum secretaries of Pakistan and India, Ahmad Waqar and S.C. Tripathi respectively, stated that the initial estimate was 90 million cubic metres of gas from Iran — 30 million for Pakistan and 60 million for India. The forecast is that India will increase its share to 90 mscmd in the next two to three years, while Pakistan will double its off-take of 30 mscmd by 2013. It was also revealed that the oil ministers from Pakistan and India planned to meet in New Delhi in February to review progress on the project.
Another encouraging development is that Pakistan, India and Iran will, for the first time, hold a trilateral meeting in February in Tehran to address the issues relating to the project, including an integrated feasibility study, project structure and a tripartite framework agreement. According to the Indian petroleum secretary, the project structure (how the project will be built and operated) and the framework agreement (the agreement between India, Pakistan and Iran on the pipeline) will be finalized by April 2006.
Pakistan’s petroleum secretary Ahmad Waqar has revealed that a technical sub-working group will be set up to sort out issues like transportation tariff, transit fee payable to Pakistan, system configuration, pipeline route and the pricing mechanism. The sub-group will meet on a monthly basis to resolve the issues before the next meeting expected to be held in early March 2006.
In the past few months, an intriguing development has taken place with regard to the estimated cost of the Iranian gas project. Until June or July this year, the 2,100 km long Iran-Pakistan-India gas pipeline was estimated to cost $4.7 billion. Then suddenly, without any explanation, reports started pouring in that officials were now putting the estimated cost of the pipeline at $7 billion which could even go up to $8 billion by the time the project was completed in 2010.
Before Pakistan commits itself irrevocably to the IPI, the cost factor should be thoroughly examined by experts and a satisfactory explanation offered for any increase in the original estimate of $4.7 billion, a figure which also needs to be carefully looked into.
It is, however, reassuring that Pakistani and Indian officials, after two days of talks, have affirmed that the IPI is being pursued despite objections from the United States. According to India’s petroleum secretary, S.C. Tripathi, Prime Minister Manmohan Singh had clarified the issue in parliament and his ministry was going by what the prime minister had said.
The Indian prime minister informed the Rajya Sabha on December 1 that the government would take decisions on the IPI “based on India’s national interest”. It may be recalled that Prime Minister Manmohan Singh, after the nuclear deal with the US in July, stated that the construction of the Iran-Pakistan-India gas pipeline project involved many risks because of uncertainties in the Iran situation.
However, according to the Indian petroleum minister, Mani Shankar Aiyar, the IPI gas pipeline is “indispensable for India’s energy security and its economic growth”. He also claims that “we have made extraordinary progress towards realizing a world-class safe and secure project”. It is no use glossing over the unpalatable truth. While the Indian petroleum minister, the man entrusted by New Delhi to negotiate the IPI, feels that “extraordinary progress” has been made in realizing the project, the Americans have been told otherwise.
The US under-secretary of state for political affairs, Nicholas Burns, believes India has no plans to sign energy deals with Iran. Addressing the John Hopkins University School of Advanced International Studies on December 1, Mr Burns was quoted by the Reuters news agency as saying: “The Indians have assured us that there is no plan on the table that is ready for decision by the Iranian and Indian governments, that any plans, any discussions, have been hypothetical and are years away”.
The above statement has not been made by some unidentified American official but by a high and responsible official who has emerged as America’s point-man and principal interlocutor for negotiations with India. Mr Burns is, therefore, expected to know what he is talking about. He has already held important discussions with Indian Foreign Secretary Shyam Saran in New Delhi.
The important question concerning the future of Iran-Pakistan-India (IPI) gas project is: where does the truth lie? Is the IPI on the chopping block or is India really serious about the implementation of the Iran gas project, as its petroleum minister says? Or is this a case of double think which means the inclination of holding two contradictory beliefs in one’s mind simultaneously and accepting both of them?
In the past US officials, including Secretary of State Condoleezza Rice, have warned both Pakistan and India against entering into a gas pipeline deal with Iran. The recent statement of Nicholas Burns makes it clear that Washington continues to firmly oppose any collaboration by Islamabad and New Delhi with Tehran on the gas pipeline project.
It is hard to believe that India will do anything that jeopardizes its nuclear deal with Washington which, besides providing sophisticated nuclear technology, also grants New Delhi the de facto status of ‘nuclear power state’. Already, there have been loud calls from some influential US lawmakers that New Delhi must keep out of the Iranian gas project. If New Delhi ignores the American pressure and goes ahead with the implementation of the IPI gas pipeline, it would mean that New Delhi believes that Washington will ultimately accept the fait accompli in the interest of the emerging strategic relationship between the two countries.
By opposing the IPI gas project, Washington is working against its own stated objective in South Asia: better relations between Pakistan and India. The opposition to the gas project has created a major foreign policy challenge for the Americans as they are trying to balance their interests in South Asia with their objective to contain Tehran. The Bush administration is now faced with a classic foreign policy squeeze: while it strongly supports friendly relations between Pakistan and India (which the IPI gas pipeline would certainly promote and strengthen) it continues to oppose the gas pipeline project because it undoes its efforts to isolate Iran.
If the IPI gas project gets implemented, its benefits and symbolism will by far exceed those of any CBM undertaken so far by Islamabad and New Delhi. It will create strong economic bonds and business linkages among the three countries in general and between the two South Asian neighbours in particular. As Prime Minister Shaukat Aziz recently told visiting Iranian Foreign Minister Manouchehr Mottaki, the IPI gas pipeline was an excellent example of regional cooperation which would create a win-win situation for all.
The economic and developmental gain from the IPI gas project will help Islamabad and New Delhi get rid of the distrust syndrome and move away from their old mindsets which have so far prevented them from giving peace, amity and cooperation a fair chance of succeeding.
The writer is a former ambassador.


