Finally there is a good news for energy starved Pakistan. After prolonged negotiations lasting 15 years, the agreement on gas pipeline was signed on June 4, in Turkey between Pakistan and Iran. Pakistan has been exploring possibilities of a long-range arrangement to ensure regular supply of gas to meet its current and future requirements. Among a number of proposals examined for an assured supply, tripartite agreements with Iran, involving Pakistan and India, popularly known as IPI pipeline has been under discussion since 1995, when it was first conceived. Differences on price fixing formula and the US opposition to cooperative relations with Iran branded as an Axis of evil further complicated the issue and delayed the agreement. Under strong pressure from US the Indian government wilted and withdrew from the project in 2008. Indian withdrawal radically altered the prospects and caused further delays. Pakistan however resisted the US pressure and the gas pipeline agreement was finally signed in Turkey on June 5, 2009, following on Inter-Governmental Framework Declaration on May 24. As per the Gas Sales and Purchase Agreement (GSPA) Pakistan will purchase 750 million CFd per day over the next 25 years. Renewable for another five years, delivery point of the gas will be at Iran-Pakistan border near Gwadar at a minimum pressure of 55 Barg (800 psig). The project on completion will be able to support 4000 MW of power generation capacity. Sources in the ISGS said that designing and finalisation of reports of financial consultants would take at least one year and work on the project "can start by mid-2010." Iran has some 15.7 percent of the world's natural gas reserves, second only to Russia, although its share in the global market does not reflect it, primarily due to US sanctions against Iran. The pipeline would run about 1,115 km in Iran, 705 km in Pakistan and 850 km in India. Total investment is estimated at $7.04 billion and may take four to five years for completion. The pipeline would enter Pakistan's off-take point near Hyderabad and run about 795km with a diameter of 56 inches through the coastal route. The gas would then flow through a 240 km pipeline of 42 inches diameter to reach Pakistan. According to the documents, Iran has already completed a 900 km, 56-inch pipeline from Assaluyeh to Iransheher and the remaining 250 km from Iransheher to Pak border near Gawadar will be completed in less than two years. Pakistan has to construct 800 km pipeline from the border, traversing along the Mekran Coastal Highway to Nawabshah, at an estimated cost of US$1.2 billion. Given India's track record of hostility towards Pakistan, one can safely assume that India's interest in IPI was to delay the project to the determent of Pakistan. While Pakistan's economic future in fact its survival is dependent on having a secure source of energy, India faces no such crisis, India has already signed a separate $22 billion Liquefied Natural Gas (LNG) deal with Iran. Its nuclear agreement with the US would also provide it a source of energy for civilian use. Pakistan, regretfully, has no such options available. The financing of the project due to US pressure still remains uncertain Pakistan has not yet approached any country for funding. Russia's natural gas monopoly GAZDROM has expressed its interest in the construction of the pipeline. World Bank has also indicated its readiness to participate in the construction and procurement of the pipeline. Intriguingly, the deal, called 'Peace Pipeline' by Iran's oil ministry, was signed on the sidelines of a tripartite summit of Pakistan, Afghanistan, and Iran on eliminating terrorism, drugs and human trafficking. The quite manner in which this landmark agreement was signed has given rise to many speculations. Dr Asim Hussain, prime minister's advisor on energy, is quoted by a local English daily that apart from the external pressures emanating from some foreign "friends" of Pakistan, there were certain elements within his own ministry, who were staunchly opposed to the Iran-Pakistan (IP) project and were busy to torpedo it at all costs. The advisor ominously said that these elements within his ministry were "wired" to the foreign actors, who were out to scuttle the deal. He said that some others were also playing in the hands of the local and foreign vested interests to rock the deal. But he strongly asserted that the agreement would not be dumped in any case. The documents show that Pakistan and Iran agreed in January 2007 on a gas price formula, which linked the delivered gas price at Pakistan's border to Japanese Crude Cocktail (JCC), resulting in an average crude oil parity of 45 percent. Interestingly, the Pakistani document showed that "Iran took the plea that its Parliament had decided that the price of gas to be exported should match the price being paid by its other buyers, namely Turkey and Armenia. Accordingly, Iran offered a revised price having an average crude oil parity of 78 percent". Pakistan authorities defend the decision to allow Iran 78 percent parity instead of 45 percent by arguing that a rigorous analysis concluded that imported natural gas even at the revised price remains the cheapest and most suitable fuel for power generation. It claimed that annual savings would range from $735 million to $1.2 billion. Whatever the merits of this debate the critical thing is that at a time when Pakistan is passing through a grave security and energy crisis, this deal with a brother country is the best news Pakistan has received. The government must ensure smooth and trouble free progress of the project and frustrate the design of those "wired" to foreign interests. The writer is a former ambassador