ISLAMABAD: In the backdrop of economic sanctions imposed against Iran because of its nuclear programme, Pakistan and Iran are all set to initial an agreement on Thursday under which Tehran would extend $250 million for the pipeline in Pakistan. But the US has issued a new warning to Islamabad.
On account of failure to get credit line from any country or donor agency in the wake of international sanctions imposed on Iran, Pakistan badly needs funding to lay the gas pipeline from MP 250, a point at the Pak-Iran border, to Nawabshah, some 785 kilometres in length.
The IP gas line is scheduled to be commissioned by December 2014 and the project will inject 750 mmcfd gas into Pakistan’s system that will play pivotal role in minimising the extremely serious energy crisis the country is faced with.
The relevant ministers or top functionaries of both the countries in the presence of their respective presidents woill initial the agreement. The Iranian President Mahmoud Ahmadinejad has already arrived in Islamabad to take part in the D-8 summit and will also sign the agreement with Pakistan on this project of paramount importance.
Dr Waqar Masud, secretary petroleum and natural resources has said that Iran might increase the credit line up to $500 million under government-to-government arrangement. The Iranian experts’ team held a meeting with top functionaries of the ministry of petroleum and natural resources to fine-tune the agreement.
Iran is extending the credit line to Pakistan after Islamabad’s failure to harness funding support from China and Russia to materialise the project because of the US and EU sanctions against Iran.
The sources said that the US ambassador Richard Olson also held a meeting with Dr Asim Hussain, advisor to PM, a day ahead of the agreement. They said the meeting was significant as when the US ambassador was holding the meeting, the Iranian delegation was also in talks with top mandarins of the Petroleum ministry on loan agreement for the pipeline.
The sources said that the US ambassador reminded Dr Asim about the impact of the international sanctions on Pakistan in case it goes ahead with the project.However, secretary petroleum when contacted said that it was a routine meeting of US ambassador with Dr Asim Hussain.
He said it was the first meeting of Mr Richard Olson after assuming the charge in Pakistan as US ambassador. Mr Waqar said that this meeting had nothing to do with the IP project.
Dr Asim Hussain was not available for comments. However, US spokesperson Rian Harris said that the Ambassador had a brief courtesy call Wednesday with the Prime Minister’s advisor on petroleum and natural resources.
This meeting was part of our regular engagement with various officials from the government of Pakistan and in no way related to the timing of the D-8.
The agenda for the meeting was the upcoming Economic and Energy Working Group meetings in Washington where the US And Pakistan will discuss how the US can build upon its current efforts to help alleviate the energy crisis.
“More broadly, however, our policy on Iran is well known, and we have made it clear to all our interlocutors around the world that it is in their interests to avoid sanctionable activities,” she said.
This was interpreted by analysts as a tacit reminder that sanctions could be imposed in case Pakistan went ahead with the pipeline project with Iran.
However, according to Mr Ahmer Bilal Sufi, eminent lawyer and expert in international law, Pakistan will not be able to complete this project under the UN nuclear sanctions against Iran saying a certain provision of the sanctions mentions that the income of any commercial deal with any country cannot be used for upgrading of nuclear programme.
Now the question arises as to who will determine that the income of any deal was being used in the nuclear programme of Iran, he asked. Definitely the United Nations will determine the usage of income in nuclear programme. “So in my view this project is a non-starter,” Mr Sufi said.
The Iran Project is not responsible for the content of quoted articles.