January 20, 2008

Iran Gas Pipeline Project Can Extend To Southeast Asia: Iranian Minister


Gas Pipeline Project Can Extend To Southeast Asia: Iranian Minister

Friday 18th of January 2008

A proposed pipeline project to transport natural gas from Iran to India via Pakistan could be extended to Southeast Asian countries, an Iranian minister says, expressing the hope that the first stage of the project would take off soon.

Iran's Minister of Economic Affairs and Finance Davood Danesh Jafari was also optimistic that the contentious gas pricing issue would soon be resolved and hinted at making large investments in India rather than parking his country's huge foreign exchange reserves in foreign banks.

'We are very positive about the (Iran-Pakistan-India) pipeline because we firmly believe that it will have a regional impact,' Jafari told IANS in an interview. He was in India to attend the Partnership Summit 2008 in Gurgaon.

'We are positive we can take the pipeline to Southeast Asia, to countries like Thailand, Malaysia and Singapore,' the minister added.

'It is an important project and can be started after every aspect of it is resolved,' he said, adding talks between Iran and Pakistan had been concluded and that India and Iran as also India and Pakistan needed to sort out their remaining issues.

'When India and Pakistan complete their talks, we are positive we will be able to start (the project).

India had signed a deal with Iran in June 2005 for purchasing 5-million metric tonnes per annum (MMTPA) of liquefied natural gas (LNG) for 25 years at $3.215 per million British thermal unit (MBTU). However, the deal could not proceed as Iran insisted on renegotiating the deal.

The 2005 contract had linked LNG prices with the Brent crude oil price with a cap at $31 per barrel. Iran wanted to raise this ceiling to $55, upping the LNG price to $4.78 per MBTU.

Jafari defended the Iranian stand, saying what had been signed in 2005 was a memorandum of understanding (MoU) that had not been ratified.

'The price will be fixed according to what exists at the time of signing the agreement,' he added.

Speaking about Iranian investments in India, the minister said Tehran would utilise its burgeoning $60-70 billion foreign exchange reserves for this.

'Previously, we would deposit this money in foreign banks. Now, we think a better way is to invest this money in countries like India,' Jafari said.

He also saw the possibility of ramping up Iran-India trade from its current level of $1.7 billion with the opening up of the two countries' economies.

'Iran was an oil-based economy. India operated in the socialistic pattern. The role of the two governments was huge. Now, both have opened up and the private sectors have a greater role to play. We are laying the foundation for this,' the minister stated.

At the same time, he maintained that trade could expand only if India resolved issues like double taxation and high customs tariffs.

Iran Holds out Possibility of Gas Pipeline

TEHRAN (FNA)- Iran's finance minister has raised the stakes in Southeast Asia by another notch by suggesting that a planned natural gas pipeline to Pakistan can be extended to Thailand.

Davoud Danesh Jafari, in a speech during an economic meeting in India, said Iran and Pakistan have reached an agreement to build the pipeline, and negotiations are to be conducted to include India, Bangkok Post reported.

But Tehran has never before suggested that the $22 billion project could be expanded to include Southeast Asia.

"We are very positive about the (Iran-Pakistan-India) pipeline because we firmly believe that it will have a regional impact," Jafari told the Indo-Asian News Service carried on IANS wires.

"We are positive we can take the pipeline to Southeast Asia, to countries like Thailand, Malaysia and Singapore."

He provided no further details, according to the IANS interview.

The talks with India centre on an Iranian offer to export five million tones of liquid natural gas to India per day for 25 years.

A natural gas pipeline from Iran to Thailand could change the economic plans of the country, and present an entirely new geopolitical situation for Thailand, which always has looked to Saudi Arabia and the West for its oil supplies and trade.

Ambassador Moshen Pakaein has become one of the busiest diplomats in Thailand over the past two years, and said in an interview printed in today's Bangkok Post that the United States has failed in what he called attempts to force ASEAN nations to support sanctions against Iran.

US Sanctions not Working

Source : http://www.bangkokpost.com/
During his term as Iran's ambassador to Thailand, Moshen Pakaein says that the two countries have developed stronger economic and political ties.

But with growing western pressure against the Islamic Republic, Asian countries are being urged to cut their links with Iran. In the ambassador's final interview before leaving the country, Moshen Pakaein discussed Iran's ties with Asean, the nuclear controversy and the Middle East peace process with GEORGE McLEOD in Bangkok

George McLeod: How have relations changed over your time here in Thailand?

Moshen Pakaein: During my three years in the country, we have had very good cooperation with officials here. We have also made agreements on oil and gas and we are buyers of Thai rice. There is cultural and scientific cooperation.

Because of the coup, progress has slowed - but after the normalisation of the political process, we are sure many other opportunities will arise.

McLeod: Your mandate also included Myanmar. Does Iran have any position on the problems in that country?

Ambassador Pakaein.

Pakaein: Myanmar is an Asean country (Association of Southest Asian Nations) and Asean countries should try to solve the problem through diplomacy. Of course, these countries have criticised Myanmar for human rights violations, but they have their own solutions to this problem, which do not include sanctions or any other radical actions.

We can say that the leaders of Asean are very wise - they are talking about the interests of the region.

Also in regard to Asean - its decision to use nuclear energy for peaceful purposes, which was something that they ratified in Singapore; we think they should develop nuclear energy under the observation of the IAEA for peaceful purposes, as we do in Iran.

McLeod: The US has been putting a lot of pressure on Asian countries to cut ties with Iran. Has US pressure affected your relations with Asean?

Pakaein: No, the Asean countries are non-aligned, and they support us in the United Nations and in the International Atomic Energy Agency (IAEA). Of course they are under US pressure to make demands against Iran, but Asean as a whole is cooperative toward Iran.

And regarding sanctions - I can mention that because of the report by El-Baradi, and because of the recent US intelligence report (which determined Iran had halted its nuclear weapons programme), the sanctions against Iran have not had a strong effect.

We don't believe that the sanctions will affect our relations with other countries.

For example, China signed a $2 billion agreement to develop one of the oil fields in Iran. This is a very important indication that they are not following the US sanctions.

It is reported that Iran has received $215 billion in foreign investment from 2000 to 2007, and China has the largest investment budget, worth $100 billion.

Crowds rally behind Iranian President Mahmoud Ahmadinejad.

Recently, Russia announced it was giving nuclear fuel to Iran, and this is very important because Russia was under US pressure. They did it ahead of schedule - so this shows that US sanctions do not affect Iran.

A new IMF report predicts that Egypt and Iran will achieve the highest economic growth in 2008 (in the Middle East) - this is another indication that the sanctions aren't working.

I am not saying that the sanctions [against Iran] are good - they will have an effect on any economy - but they have not prevented us from cooperating with other countries. We can moderate these sanctions, just like we have for the past 28 years since the revolution. But according to this report that says $215 billion was invested in Iran - it is American companies that are under sanctions. They are losing a market. Before the 1979 revolution, we were a major customer of the US.

McLeod: China and Russia have also signed onto the sanctions, so you are suggesting they have a two-faced policy?

Pakaein: According to China and Russia, they accepted the sanctions to urge Iran to co-operate with the IAEA and to urge transparency. Now, with the new reports, there is no reason for these countries to agree to new sanctions.

McLeod: It's been said that Iran's oil sector is suffering under the sanctions and lacks spare parts. Doesn't this suggest that the sanctions are having a serious impact?

Pakaein: No, that's not true. China and Russia have been investing in the Iranian oil industry. Even if you cannot get spare parts from oil producers, you can get them from the black market.

McLeod: Isn't it true that Iranian oil output has suffered?

Pakaein: No, Iran has many reserves that are untapped - the second most in the world.

The US and the western media like to propagate this myth that there are sanctions - but these sanctions are only to prevent Iran from pursuing nuclear programmes for non-peaceful purposes.

The sanctions just specify a few fields - such as the military field. But this is only to prevent Iran from selling arms - it is not preventing anyone from selling arms to Iran.

However, now we are exporting arms to more than 30 countries - even some western countries have approached Iran.

McLeod: Do you believe that the US will attack Iran?

Pakaein: I don't believe this will happen - the US doesn't have the ability to attack us.

McLeod: The US and Israel recently announced they would be cooperating on missile defence.

Does this change the strategic environment for Iran?

Pakaein: No, this is normal - they are always doing this. Israel has nuclear bombs, and the US always supports them.

McLeod: Why hasn't Iran supported the Palestinian-Israeli peace process?

Pakaein: Of course, we support peace in the Middle East, but we don't support the peace process imposed by the US. The peace process should consider four important things: first, refugees, second the Golan Heights, third, the wall; fourth - the independence of the Palestinian government.

Israel is not ready to accept even one of these issues, so this is not peace.

Bush's policy with the Middle East is to break Israel's isolation in the region, not to help the Palestinian people. There is not a single criticism of the US on Israel.

Contact: georgemcleod@gmail.com

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