Pakistan Agrees Transit Deal with Iran
Written by admin on Monday, April 28th, 2008 in Countries, World Economies.
News was released today that Pakistan has cleared the way with Iran on plans for a $7.5bn gas pipeline to India.
The proposed pipeline that will run 1,620 miles will be a lucrative investment for Pakistan as it charges transit fees on the gas India imports from its western partner.
The deal was struck on the first leg of the Iranian presidents South Asian tour which also saw Iran agree to supply Pakistan with 1100MW of electricity.
For India the pipeline is seen as crucial to supply their rapidly expanding energy needs, for which it predominantly relies on imports to support its fast growing economy.
It is also thought that the pipeline deal will help boost security between the three countries as they have more to benefit from mutual co-operation. Of the three partners India and Pakistan have fought three wars in the past half centaury
Along with its accusations of the nuclear ambitions Iran harbours, the US is against the pipeline deal as it believes it will weaken its efforts to isolate Iran. Another Eastern flowing energy pipeline is also not a positive sign for European governments.