The 2nd most critical transaction between Pakistan and Iran after the barter of Gwadar, is Iran-Pakistan gas pipeline. This plastic cum iron gas pipeline may become the pipeline of peace, harmony and social integrity at national level-among provinces of Pakistan-and at international level—between Iran and Pakistan. To some extent, without any deep peep into this project, it can be thought compulsory for both countries—particularly for Pakistan. The social fiber at national level can be knitted strongly to cure all the diseases of separation and disintegration movements by completing the IPBP project in time.
Pakistan is one of the countries using LP6 and CNG at domestic as well as commercial level. The speedily increasing demand of gas in Pakistan is going to be unmatchable by the existing supply arrangements. The near future will be more head aching in the shape of long load shedding. Thus Pakistan needs new sources of supply whether by exploring available resources with in Pakistan or by importing gas from neighbour countries—Iran or other central Asian pro-USSR satellite states-rich in natural gas. The most feasible option to acquire new supply, is Iran—Pakistan gas pipeline.
This project can shoulder the energy crisis in Pakistan. But a cost and benefit analysis is needed to decide finally whether IPGP is compulsory for Pakistan. Some shorts of IPGP are the projected energy demand and supply gap is 2580 MMSCFD by 2015, the pipeline solely would not be able to meet the said shortfall.
Existing energy crisis in the country is mainly attributable to the lack of furnace oil because of paucity of funds for importing the same. Keeping in view the monetary value i.e 7.85 MMUSD/day and 2.8 billion USD/year required to import the Iranian gas, it is skeptic to ensure enough protection against above said situations in the GSPA to avoid the embarrassing situation of blockage of gas supply by Iran in case of failure to pay the decided amount by Pakistan. This depicts the importance of payment terms and consistancy of guarantees of this agreement.
Brightly expected oil and gas discoveries in Balochistan may make huge gas supply. In this situation Pakistan would have no need of Iranian gas. The Baloch insecurities can break the supply in case of insurgency.
In view of the above discussion it is clearly evident that Bi-national gas pipeline would not be favourable for Pakistan if homework to combat the projected problems is not completed carefully. To make the IPGP more profitable what should be done is:
To talk with Baloch leadership to take them into confidence by addressing their stakes in the IPGP project by:
•    Announcing a reasonable tariff (say, $ 0.25) on each MMBTU to transmit the gas through Balochistan.
•    50 to 60 Baloch fresh engineers and 100 associate engineers may be induced into the project. A fair representation of each tribe, lying along the prjected way, if the inductees are needed.
•    A big pipe mill may be established at a central location in Balochistan to produce the whole pipe and other fringe requirements. It would create the sense of equity among Balochis.
All measures to harness the Chinese coffers for financing the project must be undertaken.
China may be included as a partner in the IPGP project, India, to minimize the fixed as well as running Cost/MMBTU of Iranian gas to shoulder the fiscal burden of Pakistan.

The above suggested measures can be taken not only to facilitate the timely completion of the IPG project but also will be helpful to the successful management of the operation of pipeline in addition to bringing prosperity to the Balochistan relevant districts of IPGP. It will also be a progressive step coupled with long run prove to be a stepping stone for the whole country into an era of prosperity and economic boom.

July 31, 2010 | Adnan Khan | No Comments | 822 views