Finalise deals with Iran

No compromise on country’s vital needs

Iran is preparing to live with the sanctions imposed by the US, EU and the UN over the next many years. It needs vital imports through barter. Pakistan is suffering from power and gas shortages. Many Pakistanis find Iran’s offers of gas and setting up a refinery useful for the country. President Zardari said last year that Pakistan was committed to early implementation of Iran-Pakistan Gas Pipeline Project while Pervez Ashraf maintained on Tuesday that the pipeline would be a “big leap forward” in resolving country’s crippling power crisis. That means defying the US sanctions.

The proposed Pak-Iran pipeline will support approximately 4,000 megawatts of power generation per day, eroding Pakistan’s electricity deficit that currently stands at 5,000 MW per day. The US supported TAPI gas pipeline cannot be built unless there is a modicum of stability in Afghanistan which may take years. Work on the Iran-Pakistan pipeline can on the other hand start immediately and be completed in 15 months. The deal for a $4 billion refinery in Gwadar with an estimated capacity of about 400,000 barrels per day would help Pakistan overcome shortages in petroleum products besides generating jobs in Balochistan. Pakistan will be required to pay in the form of food products, particularly wheat, rice and meat instead of the forex which it is short of.

Washington has made it clear that it will impose economic sanctions on Islamabad if it begins to buy gas from Iran. The position, according to The Wall Street Journal, has been reaffirmed by the US embassy in Islamabad. After the US has withdrawn forces from Afghanistan, whatever incentive it has to help Pakistan in the power sector is likely to diminish. Supplies from Iran on the other hand will fulfil the country’s needs for years to come. Zardari’s postponement of Tehran visit in December has led some to conclude that the government is using the issue of Pak-Iran gas pipeline only as an election stunt. The president has to move ahead to finalise the contracts on pipeline and the oil refinery to prove that his government will not compromise on the country’s vital needs.