http://www.juancole.com/2013/03/sanctions-inaugurate-pipeline.html
http://www.dw.de/iran-and-pakistan-start-gas-pipeline-despite-us-warnings/a-16664212
Pakistan, Iran defy US Sanctions to Inaugurate Gas Pipeline
Posted on 03/12/2013 by Juan
Iran’s president Mahmoud Ahmadinejad and Pakistani president Asaf Ali Zardari on Monday inaugurated a gas pipeline that will supply Pakistani cities with Iranian natural gas. The pipeline has been largely completed on the Iranian side, but Pakistan had problems getting the international financing to complete its leg, which will cost $1.5 billion. Iran is loaning Pakistan $500 million, and Pakistan is putting up the other billion from its own resources. They plan to complete the project by the end of 2014.
The United States has threatened unilateral third-party sanctions against companies and countries initiating big economic enterprises with Iran. The Pakistani stock market lost a few points on fears that the US Department of the Treasury will come after Pakistan for its defiance.
Pakistan, a country of 180 million, is the sixth largest in the world and it faces a severe energy crisis. It has few hydrocarbons of its own. It has enormous potential for solar and wind, but has not developed alternative energy sources– and lacks both the investment capital and the know-how to make quick strides in that area. The energy crisis is so bad that major urban populations suffer with frequent electricity outages (try running a factory that way) and brown-outs. In the punishing summers, the brown-outs or ‘load shedding’ can be deadly to certain populations, including the elderly and infirm. There have actually been electricity riots in large cities such as Lahore.
The original plan for the pipeline had an Indian leg. Whether India will in fact join in is now in doubt. But Iran may calculate that energy-hungry India won’t be able to resist hooking into the pipeline once it reaches Lahore, only 60 miles from the Indian border. Because severe US sanctions on Iran are just made up by the US congress and the Department of the Treasury and have little international backing, it is likely that they will increasingly be defied by an energy-hungry world– I.e. Pakistan’s defection on this issue, and China’s refusal to cooperate, are probably bellwethers for other countries not deeply beholden in some way to the US.
That Pakistan needs the gas, and can’t get it on such favorable terms elsewhere, is inarguable. But the two countries are calling the pipeline the ‘Peace Pipeline’ and it seems likely that the Zardari government is seeking it in part in hopes of improving relations with Iran at a time when America is disentangling itself from the region. Pakistan may want Iran’s help with stabilizing Afghanistan as the US leaves, and may want to avoid an India-Iran (Shiite-Hindu) alliance against (Sunni) Pakistan. Zardari’s Pakistan People’s Party is facing elections soon, and he may want to signal his independence from the US, which is extremely unpopular in Pakistan, in part because of its drone strikes and violation of Pakistani sovereignty. It is also possible that the civilians around Zardari are attempting to firm up relations with Iran as a way of offsetting the alliance of some hard liners in the officer corps with Saudi Arabia and with elements of the Taliban.
The USG Open Source Center translates an interview on the issues around the pipeline by Ikram Sehgal (former military officer and now head of a private security firm), appearing on the Geo TV satellite station in Urdu:
“(Begin live relay) (Unidentified anchor) The Iran-Pak (IP) gas pipeline project has been formally inaugurated by the presidents of Pakistan and Iran. We have been joined by analyst Ikram Sehgal to discuss the project. Sehgal, do you think the project will help Pakistan overcome the energy shortage?(Sehgal) It is a major as well as positive development because Pakistan is an //energy-starved// country. Due to the shortage of energy, our factories were getting closed and services were being suspended. Unemployment and price-hike were increasing, which could lead to eruption of anarchy in the country. I had been a critic to this government but it is their //very brave// and //courageous// decision. It was also necessary. Also, Iran is our good neighbor. We have got the gas at good rate. It is necessary that the project has positive effects on other areas as well. Obviously, the United States is not happy with it, but we will have to convince it that we direly needed the project for being an energy-deficient country. India imports oil from Iran but there are no sanctions against it. The United States has also signed energy pact with India, under which the later can import nuclear equipment from several countries. The United States must realize that if anarchic situation develops in Pakistan and peace and stability is disturbed within the country, it will have effect on the region. Hence, the United States should take long-term view of the project.(Unidentified anchor) Sehgal, do you think the upcoming government would also be able to bear the US pressure on the project?(Sehgal) Since the entire nation is united on the project, there would be no issue for the coming government. Also, the next government will not have to face such level of pressure. The incumbent government should be lauded for initiating the project. (end of live relay)”
http://www.dw.de/iran-and-pakistan-start-gas-pipeline-despite-us-warnings/a-16664212
Iran and Pakistan have officially begun building a natural gas pipeline meant to help Iran's ailing economy and curb an energy crisis in Pakistan. Both countries made clear that US opposition had no place in the project.
Iranian President Mahmoud Ahmadinejad held a ceremony with his Pakistani counterpart Asif Ali Zardari near their common border on Monday to celebrate the new pipeline which will pump Iranian natural gas into Pakistan.
The neighboring countries are in need of help amid two separate crises. Pakistan, for its part, is fighting an energy crisis, while Iran must find more sources of income to reverse the damage international sanctions have wrought upon its economy.
"Today is a historic day. The gas pipeline project is the beginning of a great work," said Ahmadinejad before dignitaries attending the event.
The pipeline is to stretch over 780 km (485 miles) of Pakistani territory once completed. Iran has already built most of the pipeline on its own side.
Iran reportedly plans to loan Pakistan $500 million (383.4 million euros), or one-third of the total cost, to help finance the project, which officials hope to have running by the end of 2014.
Facing harsh criticism
The US and EU have imposed tougher sanctions on Iran over the past year in an effort to force the country's leadership to stop its uranium enrichment program. Western countries contend that Ahmedinejad intends to develop nuclear weapons, an allegation he has repeatedly denied.
"The pipeline has nothing to do with the nuclear issue. You can't build an atomic bomb with a natural gas pipeline," Ahmadinejad added.
By entering into a business partnership - particularly one that finances the energy sector - with the sanctioned country, Pakistan could also find itself sanctioned by the US. Yet, the gains from the pipeline seemed to outweigh the potential consequences of defying the West.
"We hope our friends understand our energy needs," Zardari's spokesperson, Farhatullah Babar, told the Associated Press.
Zardari's Pakistan People's Party also stands to gain politically ahead of upcoming generally elections. Not only does the party appear to be fighting the country's energy shortage, it is also standing up against the US.
"The completion of the pipeline is in the interests of peace, security and progress of the two countries ... it will also consolidate the economic, political and security ties of the two nations," Pakistan and Iran said in a joint statement.
kms/hc (AFP, AP)
http://www.npr.org/blogs/thetwo-way/2013/03/11/174003303/pakistan-begins-construction-of-pipeline-link-with-iran
Pakistan Begins Construction Of Pipeline Link With Iran
Iran and Pakistan are moving closer to completion of a nearly 1,000-mile natural gas pipeline linking the two countries, despite U.S. objections that it could become a source of hard currency for Tehran in defiance of international sanctions.
Monday marks the beginning of construction on Pakistan's part of the pipeline, which will consist of a 485-mile run. Iran has already completed most of its 760 miles of the link, which will stretch from Assaluyeh along Iran's Persian Gulf coast to Nawabshah in Pakistan's Sindh province.
The pipeline is meant to help alleviate shortfalls in energy demand in Pakistan, where brownouts and blackouts occur daily.
In a live television broadcast Monday, Iran's President Mahmoud Ahmadinejad stood side by side with his Pakistani counterpart, Asif Ali Zardari just inside the Iranian border.
Iran reportedly gave Pakistan a $500 million loan for the project, which is expected to cost Islamabad $1.5 billion.
"Today is a historic day. The gas pipeline project is the beginning of a great work," Ahmadinejad told assembled dignitaries from both countries.
"The Westerners have no right to make any obstacles in the way of the project," he added.
The U.S. has strenuously objected to the project, which Iran and Pakistan agreed to in 1995.According to the Pakistani media, U.S. Consul General Michael Dodman said in January that the U.S. would impose sanctions on Islamabad if the pipeline went ahead.
"If this deal is finalized for a proposed Iran-Pakistan pipeline, it would raise serious concerns under our Iran Sanctions Act. We've made that absolutely clear to our Pakistani counterparts," State Department spokeswoman Victoria Nuland said during a Washington news conference last week.
Pakistan's Dawn newspaper reports that Pakistani presidential spokesman Farhatullah Babar "brushed aside" U.S. concerns and pressures.
Babar was quoted as saying the project is only about energy requirements.
"The project will bring economic prosperity, provide better opportunities to the people and help defeat militancy," he told Dawn.
The pipeline was scheduled to begin operations in 2014, but delays have caused construction to fall behind.
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