Pipeline Politics Drive Sweden, China to Cool on Iran-Pakistan Gas Route

---

Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Both of the gas pipeline projects that have been proposed to bring gas from Iran and Turkmenistan eastward through Pakistan continue to be buffeted by the vagaries of international politics and finality on funding arrangements.

Sweden has now come out strongly against the Iran-Pakistan pipeline project and has advised Pakistan to find alternative routes. At the same time, Sweden has called the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline project "unviable."

In addition to negative opinions on the practical viability of the projects, Sweden is also motivated by many Western nations' strong sanction campaign against connections with Iran, as those nations believe Iran is pursuing a nuclear weapons program.

Before the Swedish position was reported, the Industrial and Commercial Bank of China (Shanghai) took a step back from the Iran-Pakistan pipeline project after the bank had been selected as the financial advisor in international competitive bidding, where it was the lowest bidder for the contract, which it is now reluctant to sign. The bank would be responsible for $1.5 billion of funding for the 800-kilometer line, which, according to a 2009 contract, would supply 750 million cubic feet of gas per day to Pakistan from Iran's South Pars fields.

Not unexpectedly, Pakistan's Foreign Minister, Hina Rabbani Khar, said that funding for the Iran-Pakistan pipeline project was not an issue, as other sources of finance were available.

It was reported in The Nation that a high-level Russian delegation would visit the Pakistani capital of Islamabad to discuss investment opportunities on the project. The Russian delegation, led either by the country's foreign minister or petroleum minister, is expected in April or May.

For related information, see January 30, 2012, article - TAPI Gas Pipeline Advances with Agreements between Turkmenistan-Afghanistan and Pakistan-India.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.