After lifting of economic sanctions, Iran is likely to emerge as the new economic power in the region having free access to the European banking system and the oil market. The country has also hit the jackpot as it is going to receive a huge amount of $100 billion in foreign reserves which were frozen by the United States in the aftermath of sanctions. From Pakistan’s perspective, this is a good omen if the government is really serious in reviving the ambitious Iran-Pakistan gas pipeline project. The project, which was due to be completed years ago, has been delayed due to international sanctions on Iran. Still there are no official words from the government on the lifting of sanctions and the fate of the project.
Earlier, leaving over $7 billion project with Iran in the middle, the government looked toward Russia for energy resources and signed a deal with the Russian government for the import of LNG. The $2 billion deal covered the construction of North South Pipeline from Karachi to Lahore to transport the imported LNG and the firm, RT Global Resources, was assigned to execute the project. Russian President Vladimir Putin was also ready to visit Pakistan to perform the ground-breaking of the project. However, now a Pakistani delegation under Petroleum Minister Shahid Khaqan Abbasi is discussing the course of action on implementing the project with Russian officials. The 1,100-km-long pipeline will have a capacity to transfer 12.4 billion cubic metres gas per annum from LNG terminals in Karachi to Lahore. The first phase of the project is expected to complete by December 2017. Pakistan will have to provide 15 percent of the total cost while the Russian government will bear 85 percent of the cost.
Russia is one of the largest natural gas producers in the world and is keen to enhance economic cooperation with Pakistan. Now the two sides will discuss a plan to set up LPG-air mix plants in the areas where pipeline network is not available to supply gas. There are many grey areas where both Pakistan and Russia can develop understanding and increase economic cooperation. Trade between the two countries can also be enhanced as Russia is a big market for various Pakistani products. However, the government should not ignore the immediate neighbor Iran, especially after bottlenecks in the way of economic cooperation have been removed. Both Pakistan and Iran are Islamic countries and have deep religious and cultural bonds. The revival of the gas pipeline will be in the interest of both the countries.
