Iran and Pakistan upbeat on gas pipeline, bilateral trade 

Iran and Pakistan upbeat on gas pipeline, bilateral trade 
Iranian labourers work on a section of a pipeline - adorned with Iranian (L) and Pakistan (R) flags.

This optimism on stepped up economic and business relations were voiced at the just-concluded visit to Islamabad by the Iranian Foreign Minister Jawad Zarif.

By M. Aftab/Analysis

Published: Mon 24 Aug 2015, 12:00 AM

Last updated: Mon 24 Aug 2015, 12:03 PM

Iran and pakistan have decided to complete the Iran-Pakistan Gas Pipeline on a fast track and to expand their bilateral trade manifold, besides cooperating in the massive China-Pakistan Economic Corridor project.
The two countries are very upbeat over the pipeline and trade prospects on as Western sanctions are set for lifting by US and Western sanctions which were aimed at stopping Iran from producing nuclear weapons.
This optimism on stepped up economic and business relations were voiced at the just-concluded visit to Islamabad by the Iranian Foreign Minister Jawad Zarif. He had detailed negotiations on these subjects with Sartaj Aziz, Advisor to Prime Minister Nawaz Sharif on National Security and Foreign Affairs.
Iran and Pakistan negotiations led to several key decisions in sectors like energy, natural gas, trade, and specifically the ongoing Iran-Pakistan Gas Pipeline Project. Zarif and Aziz agreed that enhancing bilateral cooperation in the energy sector is one of the major  areas of mutually beneficial cooperation. The Iran-Pakistan gas Pipeline should be completed in the shortest possible time.
Zarif said "my visit to Pakistan, the second in four months, is significant because Iran wants cooperation with Pakistan in all  sectors." He also said "technical work on Iran-Pakistan Gas Pipeline (IP-Gas) project is in progress in coordination with relevant ministries of the two countries. Economic relations between the two countries will further deepen as soon as decades-long Western restrictions on Iran are lifted, following the Nuclear Agreement with P5+1."
Zarif, replying to a question also supported the ongoing completion of $47 billion plus China-Pakistan Economic Corridor, or CPEC. He said, "Iran supports growth and development in Pakistan and the entire region."
Equally jubilant over the prospects of lifting of the sanctions, Zarif's counterpart Sartaj Aziz reciprocated, and said: "We  have had positive discussions over expansion of the bilateral cooperation, and we will go ahead with full speed to achieve our goals and decisions." Aziz congratulated Tehran over Iran's nuclear agreement with the world powers, as implementation of the I-P gas deal will contribute to regional and international peace and security. It will also open new avenues of economic and commercial cooperation between Pakistan and Iran.
Energy-starved Pakistan has been pinning great hopes over the US-Western and Iran nuclear talks because its vital I-P gas projects has been held up for two decades for one reason or the other. The project was initiated in 1994 to supply 5.6 billion cubic feet (bcf) of gas from Iran's South Pars gas fields. It included supply of 2.5bcf to India and 3.1 bcf to Pakistan. It had a projected cost of $7 billion at that time.The cost escalated rapidly to $10 billion in 2012.
India pulled out of the project when US nuclear sanctions were applied against Iran, but Pakistan stood by the project. Iran and Pakistan decided to complete the project by 2014 at a cost of $10 billion.
The project was re-activated in 2010. Former Pakistan president Asif Ali Zardari visited Iran in March 2013 and participated in the ceremony marking completion of the Iranian portion of the pipeline.
Prime Minister Nawaz Sharif is very enthusiastic about the Iran-Pakistan project. "He is hopeful that the project will be taken up quickly," his Minister for Petroleum and Natural Resources Khaqan Abbasi said.   The project in its current form entails lying down 1,800 kilometers (1,100 miles) of pipeline from Iran to Pakistan. Iran, started building the projected in 2012 and in 2013 completed it.
Pakistan has been holding up on construction due to the sanctions. But now, Islamabad is reactivating it, as China is also  financing the project. China is to lay the pipeline from Southern region of Nawabshah to the already operational deep-sea port of Gwadar, located just across the Straits of Hurmoz, which connects Pakistan with GCC countries. Gwadar is also close to Iran and its natural gas region of South Pars.
Abbasi, said: "As soon  as the Nawabshah-Gwadar portion of Iran-Pakistan projects is constructed, we will have to build only 80 kilometres of the pipeline for which work is in hand. We have drawn up plans to extend this pipeline with north-Western China, to benefit from China-Pakistan Economic corridor."
Official and across the border unofficial trade between Iran and Pakistan has been growing fast, especially through the land route - from the Pakistani border town Chaman and Taftan, the Iranian border town. It includes huge, unofficial import of Iranian oil and petroleum products through trucks and buses carrying large oil cans. One estimate puts the official Iran-Pakistan bilateral trade at $1.0 billion a year.
Alireza Haghighian, Tehran's Ambassador to Islamabad said: " Iran  is ready to fulfill Pakistan's requirements of electricity, natural gas, crude oil and petrochemicals, besides cooperation in infrastructure projects like laying highways, and rail tracks, construction of dams, and setting up oil refineries and power plants." Pakistan's public and private sectors are likely to gab this offer, raising the two-way trade, investment and employment of manpower on the two sides, manifold. With all these plans in view, and the sanctions out of way, the two countries and the region have good prospects to expand business from energy to petrochemicals, and food to  fuel. 
Views expressed by the author are his own and do not reflect the newspaper's policy.

More news from Economy