Given the comparative advantage of Iran in meeting their growing demand for gas, the project has brought the two rivals closer.

Referred to as ’the peace pipeline’ by Iran, the pipeline is now recognized as a win-win geo-economic initiative for the three parties concerned.

After the last meeting of their representatives in Tehran to resolve pending issues, Pakistan’s Ambassador to Iran Shafkat Saeed talked to Iran Daily and elaborated on different aspects of the project, including political and security issues.

Shafkat Saeed, 57, holds a Master’s in science. He has served in Pakistan’s missions in Paris, Bern, Cairo and Abu Dhabi. Following his stint as ambassador to South Africa and later Kuwait, he was appointed ambassador to Iran. Excerpts of the interview:

Q: What is the necessity for Iran-Pakistan-India gas pipeline?

A: This is not a new project. It has been under discussion between the three countries for a number of years. Pakistan needs energy because we have substantial amounts of gas which we have used in the last 40 to 50 years. Our energy needs are growing because the country has become much more industrialized and we need to buy gas from one of the neighboring countries.

We were examining three options: one was Turkmenistan via Afghanistan, the second was Qatar through the Persian Gulf and the third was from Iran. India was also interested in buying gas because its requirements have increased. Therefore, the two countries negotiated with Iran and we have now a substantial understanding with Iran on the pricing mechanism and other issues. There are still some problems to be discussed and resolved, which we hope to do in the coming weeks.

Q: Pakistan will make 400 to 600 million dollars annually from the pipeline. Is that correct?

A: No, Pakistan will use about half of the gas and the rest will go to India. Pakistan is not just passing on gas to India; it is (going to be) a major user of the gas. The amount of money you mentioned as transmission fee is not correct. We are still negotiating with India on a formula and we hope to reach an agreement in the next two weeks, but the amount will be substantially less than what you said. We have said in the past that we will build the pipeline even if India does not need the gas. Iran is the seller and we are the buyer. There is every reason for us to pursue this project from a commercial point of view.

Q: Will America’s policies and military actions in the region affect this project?

A: As I said, we look at it from a commercial point of view. We are buying oil from Iran. It is a commercial deal and we do not see any reason why we should not proceed with this project. We have successfully negotiated with Iran.

Q: Can discussions over the price of gas create an obstacle to the whole project?

A: We have already reached the agreement over the pricing. Iran had appointed a consultant from Britain to advise on the pricing formula. The consultant has given a formula which is linked to the price of crude oil. When the price of oil goes up, the price of gas will also increase. We have accepted the formula and therefore there’s no problem. India has also accepted it.

Q: Back to the pipeline, how will it benefit Iran, India and Pakistan?

A: First of all, it will cement our economic relationship and will establish ties between the three countries on a long-term basis because the pipeline will be a major source of energy to India and Pakistan for 30 to 40 years. We hope that it will also contribute to expansion of relations between India and Pakistan. Iranians call it a peace pipeline; we hope that it will bring peace.

Q: Do just the Iranians call it the peace pipeline?

A: This is what Iranian newspapers say. It will substantially alter the perception between the three countries and I think it will contribute to peace in the region.

Q: Considering the historical differences between Pakistan and India, especially over the Kashmir issue, don’t you think the Indians should be worried because of Pakistan’s involvement in the gas project?

A: No. The three governments will sign an agreement which will guarantee the pipeline. It will also guarantee the pipeline’s security. Iran will undertake the security of the pipeline up to its borders with Pakistan. Similarly, Pakistan will ensure the security within the country and also up to its borders with India.