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(STICKY) (WSJ BLOGS) U.S. Threatens Pakistan: Drop Iran Pipeline

COMMENT - Hillary Clinton is the co-sponsor of economic sanctions against the Zimbabwean government (ZDERA) as well. They too were 'particularly damaging' and destroyed the national currency. They are starting to look like her favorite tactic.

U.S. Threatens Pakistan: Drop Iran Pipeline
By Tom Wright

U.S. Secretary of State Hillary Clinton has threatened Pakistan with sanctions if the country continues with plans to build a natural gas pipeline to Iran. The U.S. is moving to squeeze Iran financially in a bid to force it to drop its nuclear program. But Pakistan has been unwilling to line up behind the U.S., saying it needs Iran, a neighbor, to help it meet a massive energy shortage.

Mrs. Clinton told a U.S. House of Representatives subcommittee Wednesday that sanctions could be triggered if Islamabad presses ahead. As Pakistan’s economy already is in dire straits, the sanctions could be “particularly damaging” and “further undermine their economic status,” Mrs. Clinton said.

Pakistan’s top bureaucrat in the Petroleum and Natural Resources Ministry, Muhammad Ejaz Chaudhry, said the pipeline was crucial for Pakistan’s energy security – the longstanding Pakistan position. But he added that Pakistan was “committed not to create any problems.” A spokesman for the Foreign Ministry was not immediately available to comment.

“Pakistan has announced that the multi-billion-dollar gas pipeline deal with Iran is still on, despite the US pressure,” Iran’s official Islamic Republic News Agency said in a report Thursday. Tehran says its nuclear program is for peaceful purposes.

The pressure on Pakistan comes as the U.S. is calling on India, China and Turkey to reduce their imports of Iranian crude oil. Mrs. Clinton said earlier this week the U.S. was having “very intense and very blunt” conversations with the three countries on the issue.

The U.S. also has been disrupting financial networks that Tehran relies on to get foreign currency for its oil sales.

The pressure appears to be having some success. The European Union agreed in January to ban Iranian oil imports from July 1. India has stood firm in public, saying it needs Iranian oil. But Indian news reports say the country has quietly been seeking increased oil supplies from Saudi Arabia and Iraq in a bid to wean itself off Iranian supply.

The threat to Pakistan comes amid very poor relations between Islamabad and Washington. The two nations are ostensibly allies in the war against the Taliban. But the U.S. blames Pakistan for continuing to support some elements of the Taliban, a charge Pakistan denies. Military and civilian officials in Pakistan were vexed by the U.S. decision in 2005 to enhance civilian nuclear cooperation with India, while denying a similar deal to them.

Pakistan is building civilian nuclear reactors with China’s help but says it needs to do more to ensure its energy security.

Work on the Pakistan-Iran pipeline, which is to link Iran’s South Pars gas field with Pakistan’s Baluchistan and Sindh provinces, has not yet begun. An earlier plan to extend the pipeline through to India, at a total cost of $7 billion, was dropped after New Delhi pulled out under pressure from the U.S.

The current project is valued at $1.5 billion and is scheduled for completion by 2014, Mr. Chaudhry said. Once operations begin, Iran has committed to supply 750 million cubic feet of gas per day for 25 years.

Pakistan relies on gas for half its energy needs but domestic supplies are declining, forcing the country to rely on imports. The gas shortages have contributed to an energy shortfall which means most parts of the country suffer lengthy blackouts on a daily basis.

You can follow Tom and India Real Time on Twitter @TomWrightAsia and @indiarealtime.

Labels: HILLARY CLINTON, IRAN, OIL, PAKISTAN, SANCTIONS, UN

posted by MrK @ 12:49 AM