measures to alleviate the effects of US sanctions on European firms, and has announced the creation of a new mechanism, SPV, to facilitate financial transactions with Iran.
Analysts are split on the SPV effectiveness. Some dismiss it as a symbolic gesture which would have no effect, but some others say it would be a beginning for Europe to end its dependence on the US financial system.
Pakistan Determined to Get Iran Gas
In the wake of the US withdrawal from the JCPOA and President Trump’s threat to penalize companies doing business with Iran, many companies put their negotiations or business on hold.
However, Iran kept making efforts. Iran’s Petroleum Ministry follows up on oil and gas talks. One of these projects is Iran’s gas exports to Pakistan, which have been delayed for years due to the US sanctions.
Zamani-Nia said the new Pakistani government has expressed its political will to broaden its economic ties with Iran and is following up on the gas project.
“To that end, Pakistan has established two (financing and sanctions) committees to facilitate the process of Iran’s gas exports to Pakistan. The findings of the committee’s ongoing studies are expected to end in a meeting between Iranian and Pakistani petroleum ministers in coming months to lead to the materialization of the agreement,” he added.
Zamani-Nia said it was more profitable for Pakistan to receive gas from Iran than from any other nation.
“The legal aspects of this agreement will be definitely discussed if the petroleum ministers of the two nations meet,” he said.
In 1990, a “peace” gas pipeline was planned to be built connecting Iran to Pakistan and India. It was expected to promote peace and friendship in the Indian subcontinent. Under the initial agreement signed between the three countries, a 2,700-km pipeline was planned to carry gas from Iran to India, while cutting through Pakistan’s territory. Under the initial deal, 1,100 kilometers would be laid out in Iran, 1,000 kilometers in Pakistan and 600 kilometers in India. The IPI pipeline would pump 150 mcm/d of gas to Pakistan and India – 90 mcm/d to India and 60 mcm/d to Pakistan. The project was alas killed.
Then, Iran and Pakistan were to build a pipeline between themselves. Under the pretext of sanctions and foreign pressure, Pakistan has so far failed to meet its commitments for completing its own section of the pipeline.
A deadline given to Pakistan to complete its own section of the pipeline expired in 2014. Iran has however built its own section of the pipeline stretching from the giant offshore South Pars gas field to the Pakistani border.
Islamabad claims it is making its best to complete its own section of the pipeline, 700 km long, to be able to receive Iran’s natural gas to meet its energy shortages.
Lost Opportunity
Iran failed to make maximum gain from the JCPOA due to domestic criticism of the new model of oil contract – the Iran Petroleum Contract (IPC) – which the Petroleum Ministry developed to lure back foreign investors.
History will never forget delays in the endorsement of the IPC by relevant bodies in the country to allow for the signature of oil contracts before Trump’s withdrawal.
Zamani-Nia agrees with analysts who believe that Iran lost big opportunities created post-JCPOA.
“Iran had 17 months starting from the implementation of JCPOA to the US’s exit to benefit from this opportunity and the international community’s support, but in practice it didn’t happen and the JCPOA opportunity to some extent was lost,” he said.
Citing the example of Phase 11 of South Pars development, he said: “Had the agreement with [France’s] Total been signed two years earlier and this company had invested $1 billion in Iran, I assure you that it would not have left Iran so easily.”
“Even if Total left Iran, it would bring the project to stage which Iranian engineers could continue up to the end,” he said.
“Had Iran concluded several international agreements instead of a single one, Mr. Trump would have been more cautious in re-imposing the sanctions,” said Zamani-Nia.
He said he was not seeking any “blame game” in the oil sector, adding: “Nobody predicted that someone like Mr. Trump would be elected US president to target the JCPOA due to his enmity with [his predecessor] Mr. [Barack] Obama.”
“That is alas politics and everything is not predictable,” he said.