The IP gas pipeline project will immensely benefit both Iran and Pakistan. However, financial limitations, regional involvement and international pressures are rapidly mounting.

Energy shortage, particularly due to a paucity of gas, has become a persistent menace for Pakistan. Besides the terribly hit local industries, gas shortage is affecting even the common man’s life, with low gas pressure on stoves and room heaters, insufficient heating in home geysers, CNG load-shedding and much more.

In a situation so dire, relevant authorities have been struggling to find viable solutions, with the Iran-Pakistan (IP) gas pipeline deal emerging as a much-mooted option. Initially, the pipeline project included India – a 2700 km pipeline running from Iran’s South Pars fields in the Persian Gulf, going through Karachi and Multan in Pakistan, and finally to Delhi, India.

However, India withdrew from the project in 2009 on grounds of security and high gas pricing concerns. It was widely alleged that India’s withdrawal was prompted by US pressure to withdraw. India had signed a civilian nuclear deal with the US the previous year only and it is believed that this deal pressured India to comply with American foreign policy goals. It is not that Pakistan was spared of US pressure; the White House pressed both neighbors to refrain from signing any deal with Iran due to suspicions about the latter’s nuclear project, which is suspected of aiming at building nuclear weapons.

The hidden agenda behind the War on Terror is securing control over oil and gas reserves. The Iran-Pakistan Gas Pipeline project has brought this fear to the forefront and has heightened regional involvement.

A statement by US Ambassador to Pakistan at the Lahore University of Management Sciences (LUMS) on November 25, 2011 that “Pak-Iran gas pipeline is not a good idea….however, the plan to get gas from Turkmenistan is a better idea,” was not a mere reiteration of the economic interests of the United States and its allies. The statement, in effect, has serious political connotations that relate to an area that has always been the battlefield of the Great Game. The Pakistan government reacted strongly against Cameron Munter’s statement, saying, “Islamabad will not accept any dictation regarding its internal affairs from any foreign country. Gas from Iran is in the country’s best interest.”

The successful completion of the Iran-Pakistan gas pipeline project could trigger future areas of cooperation between regional countries.

An energy crisis continues to hinder economic progress in Pakistan. In the scorching summers, available electricity meets only 60 per cent of the country’s needs and in the chilling winters, the same becomes true for gas supply.

Lack of domestic and foreign funding in energy infrastructure over the years has created a precarious situation and has left us with few options to overcome it. Pakistan has seen fiscal constraints paralyze the country due to its engagement in the war-on-terror. Sheer mismanagement of public sector funding in huge energy projects has dealt a severe blow to an already struggling industry. Foreign funds are also difficult to secure under present circumstances - especially large amounts that are required for gigantic energy supply projects.

The Iran-Pakistan gas pipeline is a dream project that is expected to revolutionize Pakistan’s industrial sector, but it needs to be protected from the evil eye.

Pakistan faces an acute crunch in the power sector, both in electricity and gas. Endeavors to meet electricity needs through rental power projects have been unsuccessful due to various factors, including corruption.

Gas is another energy source. Pakistan’s own supplies from the Sui gas field fall considerably short of the requirement. Majority industries in the country therefore, face three to four day gas outages a week. Consequently, many have shut down businesses, because export orders cannot be met. According to reliable data, around 321 industrial units have been shut down in Balochistan and Khyber-Pakhtunkhwa during fiscal 2010. The country’s fertilizer industry is also facing an acute shortage of gas, which results in increased imports of Urea. This has an adverse impact both on the economy because it costs the government billions in the form of subsidy on imports and the agriculture sector as a whole.