A new report published by Pakistani media says Islamabad is considering the possibility of importing Iran's crude oil via land route following removal of international sanctions against Tehran.
The report, published by The Express Tribune on Saturday, quoted an unnamed Pakistani official with knowledge of the development as saying that discussions are going on in government circles that Pakistan must remove the restrictions it has imposed on importing Iranian crude after the United States and the European Union (EU) withdrew sanctions against Iran's energy and economic sectors.
Sanctions, which had been imposed on Iran by the EU and the US over Iran's peaceful nuclear program were lifted after Tehran and the P5+1 group of countries five permanent members of the United Nations Security Council plus Germany started implementation of the nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA), which they had clinched last July in the Austrian capital, Vienna.
Noting that Pakistan stopped oil imports from Iran through land route about six years ago, the anonymous official said, This plan will lead to resumption of oil imports from Iran which has been on halt since 2010.
The official noted that by resuming Iran oil imports via land route, oil smuggling from the Islamic Republic, which is usually conducted through Pakistans Balochistan Province, will come to an end.
In an effort to check goods smuggling, particularly petroleum products, form Iran, the government in Islamabad has ordered the countrys law enforcement agencies to seal a 500 kilometer belt along the two countrys common border by digging trenches and placing barbed wire. However, the measure has so far failed to stop smugglers, who can still find a way to dodge the security checks.
According to The Express Tribunes report, instead of refined oil, Iran is capable of exporting crude oil in big volumes.
Two major Pakistani refineries Pakistan Refinery Limited and Bosicor imported crude oil from Iran until 2010, but after sanctions were imposed against Tehran, banks refused to open letters of credit for oil purchases.
[caption id="" align="aligncenter" width="555"]
File photo shows a refinery run by Byco Oil, which is known as Pakistans largest oil refinery in the southwestern Balochistan Province.[/caption]Based on studies conducted in Pakistan, inability to pay for Iran's oil through banks is the main stumbling block in the way of trade with Iran. Now, with sanctions against Iran's energy and economic sectors lifted, Pakistan is hoping to open banking channels in June this year, which will serve as a prelude to open the land route for importing crude oil from Iran.
Available figures show that at present, oil demand in Pakistan stands at 22 million tonnes per year, of which 13 million tonnes is produce by local refineries and the remaining is imported.
The country is currently importing crude oil from the United Arab Emirates (UAE) and Saudi Arabia to meet the requirement of domestic refineries, including Parco, Pakistan Refinery, Attock Refinery, National Refinery and Byco.
The energy crisis in Pakistan, which suffers about 12 hours of power cuts a day, has worsened in recent years amid 4,000 megawatts of electricity shortfall. The nation of 190 million people can only supply about two-thirds of its gas needs.
Therefore, in addition to importing oil, Islamabad has been looking for natural gas imports, including from Iran, in order to quench the countrys thirst for energy.
In late February, an Iranian official said Pakistan is firm on receiving gas from Iran through a pipeline, dismissing reports that Islamabad might have ditched the project.
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File photo shows an Iranian worker welding two gas pipes at the beginning of construction of a pipeline to transfer natural gas from Iran to Pakistan, at the mile 250 in southeastern Iran, near the Pakistani border. AP[/caption]Iran built the 900 km length of the pipeline, known as the Iran-Pakistan (IP) gas pipeline, on its territory in 2013, pending Pakistans completion of its section to start the gas flow. Islamabad has fallen behind the target to take gas deliveries in the winter of 2014.
The country has been dragging its feet under pressure from the US, which is supporting the alternative TAPI pipeline project and has been urging Pakistan to consider other options. TAPI, which gets its name from Turkmenistan, Afghanistan, Pakistan and India, is a pipeline project worth USD 10 billion aimed to pump natural gas to South Asia. It is scheduled to be completed by December 2019 with a capacity of 33 billion cubic meters.
Islamabad has never given up purchasing Iranian gas, said Managing Director of the National Iranian Gas Exports Company (NIGEC) Alireza Kameli.
He added that neither liquefied natural gas imports from Qatar, nor using TAPI, which would require Pakistan to pay a high price to receive gas through this pipeline could be considered as viable alternatives to IP gas pipeline.
By Press TV
