Despite Iran and Pakistan signing on an ambitious gas pipeline deal with its possible extension to India, the multi-billion project is unlikely to take off, according to the text of an American diplomatic cable released by WikiLeaks.
A source, whose name has been removed in the cable, confided to the US diplomat in a private conversation on June 4, 2009, that he viewed near-term implementation of the Iranian-Pakistani gas link project as "very unlikely".
"The downbeat comment was made despite the recent signing of an Iranian-Pakistani MoU in Istanbul by President Ahmadinejad and President Zardari, committing to the gas project," it said.
"According to the report, the source indicated he had several reasons for this opinion, but the only one he elaborated was that "the Pakistanis don't have the money to pay for either the pipeline, or the gas," the cable said.
During a panel discussion at the Baku Oil and Gas Show from June 2-5, 2009, on the future prospects of Caspian gas, several commentators noted the difficulty of doing business in "unpredictable, overly bureaucratic" Iran, and the alleged historical "unreliability" of Iranian gas supply contracts previously reached with Turkey and Turkmenistan.
"For example, panelists recounted that, after long negotiations, Iran has failed to sign separate Liquid national Gas contracts at the last minute for four times now."
Two panelists claimed that Iran has repeatedly diverted gas supplies to meet domestic needs, thereby interrupting its contractual gas exports - and has not paid contractual penalties for these violations, the report said.
"A source asserted bluntly that Iranian political leaders are totally focused on domestic needs and personal jockeying, and are simply not interested in hearing about the value of optimising foreign gas exports.
The only exception, he claimed, is their interest in the notional prospect of annually exporting ten billion cubic meters (bcms) of gas to Europe," the cable said.
"He attributed this interest to a conviction that such a deal will significantly increase Iran's political leverage in Europe and substantially insulate it from future European pressure - a perception he characterised as revealing, and "typically" unrealistic," it said.