12 April 2015

China is adding a Pakistan-Iran gas pipeline to its revival of the old Silk Road

April 9, 2015

China is poised to add another key section to its sometimes defiant, seemingly inexorable plan to create commercial corridors extending in all directions from its borders. Its latest move: building a natural gas pipeline linking the hitherto pariah state of Iran to security-challenged Pakistan.

The move would open a lucrative new market for gas-rich Iran, blocked from customers for decades by Western sanctions that may soon be ending. And it would begin to sate the superlatively gas-thirsty Pakistan, which has long suffered power shortages. The construction will be largely funded by a Chinese loan, and work done by a subsidiary of the state-owned China National Petroleum Corporation.

The Iran-Pakistan pipeline link has been on the drawing board for some two decades, but was foiled by the prospect of US sanctions against Pakistan if it participated. Iran says that its 560-mile portion is already built to the Pakistani border, leaving Pakistan’s $2 billion, 485-mile portion to be completed. If the deal goes ahead, the complete pipeline can be finished in about two years, according to the Wall Street Journal (paywall).

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