The IP Gas Pipeline project has been under discussion between Iran and Pakistan since 1994. Iran signed a preliminary agreement with Pakistan in 1995. Later on, Iran suggested ex­tending the pipeline from Pak­istan into India and in Febru­ary 1999 signed a preliminary agreement with India as well. The project was termed as Iran-Pakistan-India (IPI) Gas Pipeline and many experts described it as a Peace and Prosperity Gas Pipeline.

However, India withdrew from the proj­ect in 2008 after signing a nuclear deal with the US on the pretext of overpricing and security issues. Nevertheless, Pak­istan and Iran signed a final agreement on the IP Gas Pipeline at a meeting held in Ankara on 16 March 2010. The agree­ment between Pakistan and Iran was for the import of 750 million cubic feet dai­ly (mcfd) of natural gas with a provision to increase it to one billion cubic feet per day. The agreement for the supply of gas from Iran to Pakistan through this pipe­line for 25 years also stipulated that if Pakistan did not complete its part of the pipeline by 2014 it would have to pay a daily penalty of one million dollars to Iran until its completion.

This development was not well re­ceived by USA and in January 2010, it asked Pakistan to abandon the pipeline project promising to provide her assis­tance for the construction of a Lique­fied Natural Gas Terminal and importing electricity from Tajikistan through Af­ghanistan’s Wakhan Corridor.

Notwithstanding US pressure the work on laying the Pakistani section of the proj­ect was officially launched by the Presi­dents of Iran and Pakistan on March 11 2013. However due to the continuation of US and UN sanctions against Iran, Pak­istan could not go ahead with the con­struction of the pipeline on its side. Iran has all along been urging Pakistan to ful­fill its commitment failing which it might take the matter to the International Court of Arbitration. Pakistan has invariably been asking Iran to extend the deadline expressing its commitment to the project.

The US position on the project has not changed. Donald Lu assistant secre­tary of state told the Congressional pan­el during a hearing last Wednesday that the Biden administration has set a goal to prevent the construction of Iran-Pak­istan gas pipeline and has communicated to Pakistan about its red line on Tehran’s nuclear ambitions. He further said “If they get in bed with Iran, it will be very serious for our relationship. The admin­istration was tracking the pipeline devel­opments and he fully supports the efforts of the US government to prevent this pipeline from happening. We are work­ing towards that goal and the administra­tion is in consultation with the Pakistani government on the pipeline issue. He also told the panel that Pakistan has not expressed any desire to the US for any waiver of American sanctions that would certainly result from such a project.

A spokesperson of the State Depart­ment speaking to the media on Tuesday also reiterated the stance that Donald Lu had indicated during the congressio­nal hearing. He said“ We always advise everyone that doing business with Iran runs the risk of touching upon and com­ing in contact with our sanctions, and would advise everyone to consider that very carefully”

Nevertheless, the interim government at the fag end of its tenure decided to construct a portion of an 80 KM pipe­line within its territory to pre-empt po­tential legal disputes with Iran in inter­national courts. Pakistan feared an $18 billion penalty if it lost the case in the in­ternational court. The Petroleum Minis­ter Musadiq Malik has said that the gov­ernment of Pakistan has decided to seek a waiver of US sanctions on the IP Gas Pipeline Project. However, he also reiter­ated that the implementation of the proj­ect could entail five kinds of US sanctions which Pakistan could not afford to bear.

It is worth mentioning that the US had allowed waivers from sanctions to eight countries including India. However these waivers were withdrawn by Trump ad­ministration in April 2019 after rejecting the agreement with Iran. The administra­tion explained that it would grant 180-day SRE waivers from the Iran oil sanc­tions to eight countries namely China, India, South Korea, Japan, Italy, Greece, Taiwan, and Turkey – thus allowing these countries to continue importing Iranian oil while transitioning to new suppliers.

As far as Pakistan is concerned it is mind-boggling to note why successive Pakistani governments never thought of going ahead with the request for a waiv­er and completed the project while the waiver stood valid for at least six years? The materialization of the project would have tremendously helped energy-starved Pakistan to tide over the energy crisis and run the industrial wheels.

The chances of the implementation of the IP gas project had surely improved after the signing of the nuclear deal be­tween Iran, US and P5 countries in Gene­va on 24 November 2013. Soon after this development the then minister for Petro­leum and Natural Resources Khaqan Ab­bassi visited Iran and met his counterpart on 9th December wherein the two coun­tries resolved to go ahead with the com­pletion of the project. But no substantive progress was made during that period till the time sanctions were re-imposed.

Resultantly the completion of the IP Gas Pipeline remains as elusive as ever. The only way of making progress on the project is a waiver from the US as indi­cated by the minister for Petroleum. Whether the US would accede to Paki­stani request for a waiver remains a mil­lion-dollar question in view of the US po­sition explained by Donald Lu during the discussion in the Congressional panel.

The proposition seems very difficult at the moment. The animosity between Iran and the US has gained more inten­sity in the backdrop of conflict in Gaza and the alleged support of Iran to Hamas and Hizbollah. Until and unless due to a dramatic turn of events there is any kind of détente between the US and Iran the US is not going to relax sanctions against Iran and the IP Pipeline will remain a ca­sualty of global geo-political and geo-strategic considerations.

Pakistan will have to look for other alter­native avenues to fulfill its energy needs and try to convince Iran to keep the proj­ect under wraps till the time the situation becomes conducive for its completion or have the venture wrapped up through an amicable settlement between them.

Malik Muhammad Ashraf
The writer is a freelance columnist. He can be reached at ashpak10@gmail.com