There are obvious signs of frustration in Tehran. Iran has completed its 900-kilometre section of the pipeline, from the South Pars gas field to the Pakistani border. In December, Iran’s Deputy Oil Minister Ali Majedi threatened to invoke the penalty clauses of the agreement signed in Ankara between Iran and Pakistan in March 2010.

Under the agreement, construction of the pipeline was to be completed by the end of 2014. Either side is liable for a penalty of $US1 million a day if it fails to meet the deadline. Pakistan is yet to begin work on its section of the pipeline.

Washington has repeatedly expressed its opposition to the pipeline, ever since the project was first proposed in 1994. Initially the project was to be extended to India and when India backed out citing security concerns, Pakistan had brought the energy hungry China into the picture. In fact, in January last year, President Zardari asked Tehran to build the 785-km pipeline stretch inside Pakistan estimated to cost $1.5 billion. China was to chip in with its funds for the venture.

Pakistani President and his Iranian counterpart Mahmoud Ahmadinejad inaugurated construction work in March 2013, but the project got stalled. Various foreign corporations expressed interest in the project but backed off under US pressure. These companies included two entities of Pakistan -Pakistan’s Oil and Gas Development Corporation and the National Bank of Pakistan.

The US reaffirmed its threats following the interim nuclear deal reached last November between Iran and the P5+1 grouping (the US, Britain, France, China, Russia and Germany). “It’s my understanding there’s no change in position,” State Department spokesperson Marie Harf declared last month, insisting that the deal “maintains the core architecture of oil, banking and financial sanctions in place.”

The Obama administration has been advocating alternatives to I-P pipeline like TAPI – Turkmenistan-Afghanistan-Pakistan-India (TAPI) project.   American energy majors are keen to undertake the TAPI, as it appears to be financially and commercially viable in the short run itself.

Since coming to power last June, for the third time, Prime Minister Nawaz Sharif has been battling with severe energy crunch. So he has assured Iran that his government is committed to the IP pipeline; at the same time he has been showing interest in the TAPI pipeline—despite its passage through politically unstable Afghanistan.

Growing ties between Saudi Arabia and Pakistan also appear to be a factor in Pakistan’s stand on the IP pipeline. Saudi Arabia, which regards Iran as a regional rival, is bitterly opposed to the interim agreement between Iran and the P5+1 and has embarked on its own diplomatic offensive to isolate Iran. Nawaz Sharif has longstanding ties with Saudi Arabia which, saved him from Musharraf’s gallows, sheltered him after negotiating his exile plans and facilitated his return from Riyadh to Islamabad.

Saudi Foreign Minister Prince Saud Al Faisal visited Islamabad last month—the first top-level Saudi official to do so in six years.  Crown Prince Salman bin Abdul Aziz Al-Saud, who is also the country’s defence minister, is due to visit Pakistan next week.  Saudis, going by media reports, appear to be seeking Islamabad’s support to establish a 100,000-member Gulf Cooperation Council (GCC) military force to counter the threat from Iran.

No surprise, therefore, the forgotten MEIDP has come back to the table. Iran is interested in this Deepwater Pipeline from Middle East from Oman to India, bypassing Pakistan.  India is one of the biggest buyers of Iranian oil and has found some way to continue the oil deal despite the sanctions regime.

India is lending Iran a helping hand in developing Bandar Abbas and Chabahar ports; it is also building rail and road network connectivity between Afghanistan and Iran.   The Chabahar deep-sea port is a counter magnet to Gwadar port China has built on Pakistan’s Arabian coast. The advantage with Chabahar and Bandar Abbas ports is that they become an integral part of the corridor that links the Iranian coast with Bamiyan in Afghanistan and Bandar Anzali on the Caspian Sea.

Running northward through Iran and Afghanistan the corridor will link India to Central Asia, Russia, and eventually European markets. India at present reaches European markets through the Red Sea, Suez Canal and the Mediterranean. Once the new linkage is in place, it will reduce the distance by 40 percent and cost by 30 percent while bypassing Pakistan. Already India has significantly increased its economic involvement and diplomatic presence in Kabul.