Identifier
Created
Classification
Origin
08ISLAMABAD134
2008-01-09 14:50:00
CONFIDENTIAL
Embassy Islamabad
Cable title:
GOP APPROVES SIGNING OF IRAN-PAKISTAN PIPELINE
how-toVZCZCXRO7909 PP RUEHLH RUEHPW DE RUEHIL #0134 0091450 ZNY CCCCC ZZH P 091450Z JAN 08 FM AMEMBASSY ISLAMABAD TO RUEHC/SECSTATE WASHDC PRIORITY 4304 INFO RUEHNE/AMEMBASSY NEW DELHI PRIORITY 2617 RUEHBUL/AMEMBASSY KABUL PRIORITY 8027 RUEHMO/AMEMBASSY MOSCOW PRIORITY 9663 RUEHLO/AMEMBASSY LONDON PRIORITY 7023 RUEHKP/AMCONSUL KARACHI PRIORITY 8590 RUEHLH/AMCONSUL LAHORE PRIORITY 4525 RUEHPW/AMCONSUL PESHAWAR PRIORITY 3181 RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY RHEBAAA/DEPT OF ENERGY WASHINGTON DC PRIORITY RHMFISS/CDR USCENTCOM MACDILL AFB FL PRIORITY
C O N F I D E N T I A L ISLAMABAD 000134
SIPDIS
SIPDIS
E.O. 12958: DECL: 01/09/2013
TAGS: ENRG ECON EFIN EINV PREL PK
SUBJECT: GOP APPROVES SIGNING OF IRAN-PAKISTAN PIPELINE
REF: A. A) 07 ISLAMABAD 4578
B. B) 07 ISLAMABAD 4274
C. C) 07 ISLAMABAD 2593
D. D) 07 ISLAMABAD 1059
E. E) 07 ISLAMABAD 543
Classified By: AMBASSADOR ANNE W. PATTERSON, 1.5 (b) and (d)
C O N F I D E N T I A L ISLAMABAD 000134
SIPDIS
SIPDIS
E.O. 12958: DECL: 01/09/2013
TAGS: ENRG ECON EFIN EINV PREL PK
SUBJECT: GOP APPROVES SIGNING OF IRAN-PAKISTAN PIPELINE
REF: A. A) 07 ISLAMABAD 4578
B. B) 07 ISLAMABAD 4274
C. C) 07 ISLAMABAD 2593
D. D) 07 ISLAMABAD 1059
E. E) 07 ISLAMABAD 543
Classified By: AMBASSADOR ANNE W. PATTERSON, 1.5 (b) and (d)
1. (U) This is an action request. Please see para five.
Pakistan approves signing of Iran-Pakistan pipeline
-------------- --------------
2. (SBU) The GOP approved the gas sale purchase agreement
with Iran on January 8, which paves the way for signing the
Iran-Pakistan pipeline agreement. The agreement is set to be
signed in late January, but Econoff was told that no funding
sources have yet been identified. Both countries agreed to
review the gas pricing formula whenever the relationship
between the Japan LNG and Japan crude oil mix changes.
Pakistan's request to Iran for a 1.05 billion cubic feet per
day gas allocation was also approved January 8. Estimated
cost of the pipeline project without India using a 36 inch
pipeline drops from $7.2 billion to approximately $2.5
billion. India, however, may opt to participate in the
project at any time. The GOP estimates that the pipeline
will be operational in five years.
Comment
--------------
3. (C) Pakistan's decision to go ahead with the Iranian
pipeline is not without ramifications, which the GOP is well
aware. This issue has been raised many times by U.S.
officials with their Pakistani counterparts. Musharraf's
statement on the Iranian Foreign Minister's January 4 visit
stated that he would not tolerate any "external pressure to
abandon the project." Pakistan has few good options for
finding additional energy supplies. While it does have a
good gas exploration-discovery ratio, it would be difficult
to find enough domestic reserves to replicate the 1.05
billion cubic feet that the Iranians are purportedly offering.
4. (C) Comment continued: In addition, as energy and power
shortages in the aftermath of the Bhutto assassination have
shown, Pakistan cannot satisfy its current energy needs
(septel) and any significant disruption of supply has serious
consequences. While Pakistan says that it has not yet
identified a funding source, we have heard that Gazprom is
interested. We will wait to see whether this project, once
signed, actually comes to fruition.
Action request
--------------
5. (C) Action request: Post recognizes that the
ramifications for U.S.-Pakistan policy of Pakistan's
decision, particularly in the absence of Indian
participation. We would appreciate an analysis of the
sanctions implications for both the GOP and any private
Pakistani or other entities that might eventually participate
in this project. In addition, we would appreciate any
Washington agency suggestions on what the U.S. can do in the
short term to mitigate Pakistan's energy woes. We also
recommend that Washington prepare press guidance and brief
the Hill on Pakistan's motivations for concluding this
agreement. End action request.
PATTERSON
PATTERSON
SIPDIS
SIPDIS
E.O. 12958: DECL: 01/09/2013
TAGS: ENRG ECON EFIN EINV PREL PK
SUBJECT: GOP APPROVES SIGNING OF IRAN-PAKISTAN PIPELINE
REF: A. A) 07 ISLAMABAD 4578
B. B) 07 ISLAMABAD 4274
C. C) 07 ISLAMABAD 2593
D. D) 07 ISLAMABAD 1059
E. E) 07 ISLAMABAD 543
Classified By: AMBASSADOR ANNE W. PATTERSON, 1.5 (b) and (d)
1. (U) This is an action request. Please see para five.
Pakistan approves signing of Iran-Pakistan pipeline
-------------- --------------
2. (SBU) The GOP approved the gas sale purchase agreement
with Iran on January 8, which paves the way for signing the
Iran-Pakistan pipeline agreement. The agreement is set to be
signed in late January, but Econoff was told that no funding
sources have yet been identified. Both countries agreed to
review the gas pricing formula whenever the relationship
between the Japan LNG and Japan crude oil mix changes.
Pakistan's request to Iran for a 1.05 billion cubic feet per
day gas allocation was also approved January 8. Estimated
cost of the pipeline project without India using a 36 inch
pipeline drops from $7.2 billion to approximately $2.5
billion. India, however, may opt to participate in the
project at any time. The GOP estimates that the pipeline
will be operational in five years.
Comment
--------------
3. (C) Pakistan's decision to go ahead with the Iranian
pipeline is not without ramifications, which the GOP is well
aware. This issue has been raised many times by U.S.
officials with their Pakistani counterparts. Musharraf's
statement on the Iranian Foreign Minister's January 4 visit
stated that he would not tolerate any "external pressure to
abandon the project." Pakistan has few good options for
finding additional energy supplies. While it does have a
good gas exploration-discovery ratio, it would be difficult
to find enough domestic reserves to replicate the 1.05
billion cubic feet that the Iranians are purportedly offering.
4. (C) Comment continued: In addition, as energy and power
shortages in the aftermath of the Bhutto assassination have
shown, Pakistan cannot satisfy its current energy needs
(septel) and any significant disruption of supply has serious
consequences. While Pakistan says that it has not yet
identified a funding source, we have heard that Gazprom is
interested. We will wait to see whether this project, once
signed, actually comes to fruition.
Action request
--------------
5. (C) Action request: Post recognizes that the
ramifications for U.S.-Pakistan policy of Pakistan's
decision, particularly in the absence of Indian
participation. We would appreciate an analysis of the
sanctions implications for both the GOP and any private
Pakistani or other entities that might eventually participate
in this project. In addition, we would appreciate any
Washington agency suggestions on what the U.S. can do in the
short term to mitigate Pakistan's energy woes. We also
recommend that Washington prepare press guidance and brief
the Hill on Pakistan's motivations for concluding this
agreement. End action request.
PATTERSON
PATTERSON