US opposition to Iran-Pakistan gas pipeline risks losing an entire region to China (Analysis)

17 April, 2024

On April 22, Iranian President Ebrahim Raisi, is scheduled for a state visit to Pakistan. Their number one topic would probably be gas pipeline.  

In August 2023, Pakistan announced it was suspending the project under threat of U.S. sanctions. Iran rejected Pakistan’s attempts to get out of its agreement, but granted a 10-year extension, and both sides got to work on a way forward. The Iran-Pakistan natural gas pipeline was already behind schedule (Iran has completed its leg of the pipeline) and Pakistan was facing an $18 billion penalty at the time the Americans intervened.   

In February 2024, Pakistan approved the first phase of the pipeline, and in March 2024 announced it would ask the U.S. to relax sanctions so that the project could proceed. The U.S. promptly responded that “importing gas from Iran would expose Pakistan to U.S. sanctions.”

Pakistan wants to avoid the $18 billion penalty, and Iran has set September 2024 as the deadline.

Pakistan’s loss of Iranian natural gas may benefit the U.S. from a trade perspective, as it may create a dependency in Pakistan on American liquified natural gas, as in Europe after the sabotage of the Nord Stream pipeline and the cancellation of the EastMed gas pipeline.   

Another American aim may be to starve the China-Pakistan Economic Corridor, the $62 billion project to connect Kashgar, China, to Pakistan’s Gwadar port. The corridor is a major component of Beijing’s Belt and Road Initiative, consisting of highways, railways and pipelines. The inability of CPEC to supply water and power to Balochistan, Pakistan’s poorest region, may increase violence by the Baloch insurgency against Chinese companies. 

The winner in all this is China, Pakistan’s “all-weather friend.” China’s minister of foreign affairs, Wang Yi, will probably dispense with “I told you so” and start talking up “win-win” solutions as he steers Pakistan even more into China’s corner.   

China’s big investments in Pakistan, its “lifeline” energy purchases from Iran, its patience and realism in Afghanistan, and its increasing ties in Central Asia, where it has proposed a China-Central Asia cooperation mechanism and entered into Comprehensive Strategic Partnerships with former Soviet republics, shows it is “gathering in” countries with natural resources occupying strategic locations in Eurasia.  

Source: The HILL


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