US threatens sanctions on Pakistan over Iran pipeline project

BusinessUS threatens sanctions on Pakistan over Iran pipeline project

WASHINGTON: The United States said on Monday that it has raised reservations over Iran-Pakistan gas pipeline, warning that Pakistan may risk US sanctions if it goes ahead with its plan worth $7.5 billion.

“We have serious concerns, if this project actually goes forward, that the Iran Sanctions Act would be triggered,” State Department spokeswoman Victoria Nuland said in a renewed warning adding, “We’ve been straight up with the Pakistanis about these concerns.”

President Asif Ali Zardari and his Iranian counterpart Mahmoud Ahmadinejad on Monday jointly inaugurated the long-awaited Iran-Pakistan gas pipeline at Iranian border city of Chahbahar despite the naked threat of US of possible sanctions.

Nuland said “We’ve heard this pipeline announced about 10 or 15 times before in the past. So we have to see what actually happens.”

The United States had been seeking alternative plans, saying the move with Iran would take it “in the wrong direction right at a time that we’re trying to work with Pakistan on better, more reliable ways to meet its energy needs.”

Nuland said the US was “supporting large-scale energy projects in Pakistan that will add some 900 megawatts to the power grid by the end of 2013.” Those projects included renovating the power plants at Tarbela, the Mangla Dam, as well as modernising others plants and building new dams at Satpara and Gomal Zam, she added.

In a jointed statement after the inaugural ceremony, the two presidents said “The completion of the pipeline is in the interests of peace, security and progress of the two countries … it will also consolidate the economic, political and security ties of the two nations,” the two presidents said in a joint statement.

Iran has completed 900 km (560 miles) of pipeline on its side of the border and Iranian contractors will also construct the pipeline in Pakistan, Iran’s national broadcasting network IRIB reported.

Tehran has agreed to lend Islamabad $500 million, or a third of the estimated $1.5 billion cost of the 750-km (470-mile) Pakistani section of the pipeline, Fars news agency reported.

The two sides hope the pipeline will be completed in time to start delivery of 21.5 million cubic metres (760,000 million cubic feet) of gas per day to Pakistan by December 2014.

However, the project faces security challenges posed by ethnic Baloch militants who have demanded greater control over Balochistan’s natural resources and by Iranian Sunni insurgents also based in Pakistan who are fighting for greater rights in Iran.

DND

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