The future prospects of Energy Trade between South Asia, South West Asia and Central Asia generate optimism about lasting peace between the belligerent neighbours and political stability in Afghanistan. The increasing interdependency would facilitate solution or at least for the time being freeze chronic disputes between the belligerent neighbours. In either case, the enmity would give a way to amity, which generates conditions for sustainable and durable peace in the region.
Pakistan’s geographical location increases its significance in the gas pipeline business. Two gas pipeline projects, i.e. Iran-Pakistan-India (IPI) and Turkmenistan-Afghanistan-Pakistan-India (TAPI) have been already in the process of negotiations. The accomplishment of these projects would not only have economic dividends, but have lasting impact on the strategic environment of the region. The Indians demand for energy and their dependency on Pakistan for transit route certainly influence their foreign and strategic policy. Simultaneously, the hefty transit fees profit necessitates Islamabad to restore its neighbouring state confidence that it is a benign neighbour.
The progress on IPI gas pipeline has been inching forward, since its inception in the early 1990s. Nonetheless, the real efforts for its materialisation started taking place from February 2004 onwards. Pakistan has been pursuing negotiations on the $7.4 billion IPI Gas Pipeline Project, despite the American opposition to the project. The Bush administration has been opposing IPI project because it believes that it would strengthened the Iranian regime. Washington fears that Iran’s perceived nuclear weapons ambitions and links to international terrorism would gain material and moral strength, if the project materialised.
The IPI is a $7.4 billion dollar project, which certainly requires international financial investment. Whereas, the United States law prohibits any investment of more than 25 million in the project associated with Iran. Since it is a mega project, therefore American position on the project is very significant. It was reported that Washington exerted pressure on both India and Pakistan to shelve the project.
Washington has also been supporting an alternative gas pipeline project—TAPI. It was reported that in the last week, the United States also facilitated an agreement between Afghanistan and three of its neighbouring countries to build a $7.6 billion pipeline that would deliver natural gas from Turkmenistan to Pakistan and India, a project running right through the volatile Kandahar province, Afghanistan. Theoretically, the idea is brilliant, but the finalisation of the project demands earnest peace in Afghanistan. Peace in Afghanistan would not only contribute to the prosperity of the state, but would also have a positive impact on the bilateral relations in the region.
New Delhi and Islamabad have been giving an impression that they are determined to go ahead with the IPI initiative despite the Washington opposition. For instance, all the three parties agreed on a 3,000-kilometre pipeline route, originating from Iran’s southern port city of Asalouyeh and traversing through Balochistan and Sindh in Pakistan would end in New Delhi and Mumbai in India. As per the proposed contract, 60 million metric standard cubic meters of gas per day would be available to India and Pakistan (split equally) in the first phase of the project. All the three countries are currently hammering out contentious issues like gas prices, transportation tariffs, pipeline security and Iran’s right to review the gas price. It was reported in the press on April 28, 2008 that Pakistan and Iran had cleared all hurdles over the proposed $7.5 billion IPI gas pipeline and announced that an agreement would be signed soon in Tehran.
Indians are very much concern about the long term security of the pipeline which will pass through the Baluchistan. Pakistan had given written undertaking to provide international guarantees for the security of the pipeline to India.
The leftist parties in India have been pressurizing Dr. Sing government to finalize the deal with the Iran on the gas pipe and they have also been demanding that their government should avoid United States on the issue of Nuclear Deal. Whereas, the common man in Pakistan is very much supportive to these project,
The disturbing factor in addition to the United States opposition to IPI for Pakistan is India’s attitude towards the project. India’s attitude is fluctuated between inactive interests and almost indifferent. This attitude generates perceptions in Pakistan that India has been deliberately downgrading the IPI project due to its interest in the Indo-US nuclear deal. Whereas, the Indians have different justifications for the delay in the project. They opine that non-compromise on high price; transit fees, etc are the cause of delay in project.
Recently, there was a new development in the realm of gas pipelines. President Pervez Musharraf during his recent visit to China presented an idea of Iran-Pakistan-China gas pipeline. He invited China to enter in the project. In real term, this project is only persists at the theoretical or rhetorical level. In addition, there has been no feasibility study conducted on IPC project.
The practical work on the gas pipelines is awaited. But it is obvious that in future these pipelines would be a reality and they transform the strategic environment of the entire region.
