Identifier
Created
Classification
Origin
08ISLAMABAD322
2008-01-22 10:56:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Islamabad
Cable title:
PAKISTANI INDUSTRIALIST DISCUSSES IRAN PIPELINE,
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UNCLAS ISLAMABAD 000322
SIPDIS
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: ENRG EPET PGOV PK
SUBJECT: PAKISTANI INDUSTRIALIST DISCUSSES IRAN PIPELINE,
ENERGY ISSUES
REF: A. ISLAMABAD 170
B. ISLAMABAD 139
UNCLAS ISLAMABAD 000322
SIPDIS
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: ENRG EPET PGOV PK
SUBJECT: PAKISTANI INDUSTRIALIST DISCUSSES IRAN PIPELINE,
ENERGY ISSUES
REF: A. ISLAMABAD 170
B. ISLAMABAD 139
1. (SBU) Summary: Charge met with Mr. Zaheeruddin, Chairman
of Shahzad International Group, January 17 to discuss energy
issues and the proposed Pakistan-Iran pipeline. Mr.
Zaheeruddin opined the pipeline will never be constructed due
to lack of funding. He also complained the gas sale purchase
agreement binds the GOP into paying more for Iranian gas than
it pays domestic producers. End summary.
2. (SBU) Mr. Zaheeruddin, Chairman of Shahzad International
Group, called on Charge January 17 to discuss his company's
operations and Pakistan's ongoing energy concerns. Shahzad
International Group has become one of Pakistan's leading oil
and gas exploration companies and Mr. Zaheeruddin boasts
numerous former GOP officials and military leaders among his
1,500 employees. Its subsidiary, Petroleum Exploration
Limited (PEL),will drill 31 wells in the next three years
and has partnered with BP to explore three offshore parcels.
The group is also constructing a 120 MW power plant at Sukkur
in northern Sindh Province. The Sukkur plant will be
completed in 24 months and could expand to 240 MW but will
not be able to cover the current 600 MW shortage in Sukkur,
let alone supply power to the larger cities of Sindh or
Punjab. Shahzad International is also constructing a 50 MW
hydro-electric plant in Kashmir and operates gold and
precious stone mines in Pakistan's Northern Areas.
3. (SBU) Mr. Zaheeruddin stated U.S. opposition will prevent
construction of the Pakistan-Iran pipeline because no one
will be willing to finance it. He complained the gas sale
purchase agreement with Iran approved by the GOP January 8
(Ref. B) gives Iran a better price for its gas than the GOP
will pay domestic suppliers. He also said a pipeline running
from Turkmenistan through Afghanistan to Pakistan and India
is feasible but would be much more expensive and difficult to
maintain because of security concerns in Afghanistan and
Baluchistan than a pipeline from Iran. Additionally, he
stated there are concerns that Russia claims it gets first
priority for Turkmen gas, but his sources in Turkmenistan
maintain there is enough capacity to satisfy the Russians and
supply a southern pipeline.
4. (SBU) Mr. Zaheeruddin feels the solution to Pakistan's
energy woes is for the GOP to stop interfering in business
matters, establish a set tariff for any particular type of
energy project, then allow companies to come in and supply
the energy for that price with no strings attached. In the
short term, the GOP should bring in generators on barges to
cities like Karachi. He claimed these barges can produce
clean drinking water in addition to electricity and are
already in use in Bangladesh. Mr. Zaheeruddin concluded by
claiming the key to business success in Pakistan is to stay
out of politics - an interesting statement from someone who
boasts about the number of former government officials he
employs.
PATTERSON
SIPDIS
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: ENRG EPET PGOV PK
SUBJECT: PAKISTANI INDUSTRIALIST DISCUSSES IRAN PIPELINE,
ENERGY ISSUES
REF: A. ISLAMABAD 170
B. ISLAMABAD 139
1. (SBU) Summary: Charge met with Mr. Zaheeruddin, Chairman
of Shahzad International Group, January 17 to discuss energy
issues and the proposed Pakistan-Iran pipeline. Mr.
Zaheeruddin opined the pipeline will never be constructed due
to lack of funding. He also complained the gas sale purchase
agreement binds the GOP into paying more for Iranian gas than
it pays domestic producers. End summary.
2. (SBU) Mr. Zaheeruddin, Chairman of Shahzad International
Group, called on Charge January 17 to discuss his company's
operations and Pakistan's ongoing energy concerns. Shahzad
International Group has become one of Pakistan's leading oil
and gas exploration companies and Mr. Zaheeruddin boasts
numerous former GOP officials and military leaders among his
1,500 employees. Its subsidiary, Petroleum Exploration
Limited (PEL),will drill 31 wells in the next three years
and has partnered with BP to explore three offshore parcels.
The group is also constructing a 120 MW power plant at Sukkur
in northern Sindh Province. The Sukkur plant will be
completed in 24 months and could expand to 240 MW but will
not be able to cover the current 600 MW shortage in Sukkur,
let alone supply power to the larger cities of Sindh or
Punjab. Shahzad International is also constructing a 50 MW
hydro-electric plant in Kashmir and operates gold and
precious stone mines in Pakistan's Northern Areas.
3. (SBU) Mr. Zaheeruddin stated U.S. opposition will prevent
construction of the Pakistan-Iran pipeline because no one
will be willing to finance it. He complained the gas sale
purchase agreement with Iran approved by the GOP January 8
(Ref. B) gives Iran a better price for its gas than the GOP
will pay domestic suppliers. He also said a pipeline running
from Turkmenistan through Afghanistan to Pakistan and India
is feasible but would be much more expensive and difficult to
maintain because of security concerns in Afghanistan and
Baluchistan than a pipeline from Iran. Additionally, he
stated there are concerns that Russia claims it gets first
priority for Turkmen gas, but his sources in Turkmenistan
maintain there is enough capacity to satisfy the Russians and
supply a southern pipeline.
4. (SBU) Mr. Zaheeruddin feels the solution to Pakistan's
energy woes is for the GOP to stop interfering in business
matters, establish a set tariff for any particular type of
energy project, then allow companies to come in and supply
the energy for that price with no strings attached. In the
short term, the GOP should bring in generators on barges to
cities like Karachi. He claimed these barges can produce
clean drinking water in addition to electricity and are
already in use in Bangladesh. Mr. Zaheeruddin concluded by
claiming the key to business success in Pakistan is to stay
out of politics - an interesting statement from someone who
boasts about the number of former government officials he
employs.
PATTERSON