Tehran to finalise deal on Tuesday

Iran hopes to finalise a deal this week for a much-delayed pipeline to export natural gas to Pakistan by 2015, an energy official said on Sunday.

“The $7-billion Iran-Pakistan gas pipeline contract will be finalised this week, and based on the approved time framework the export of gas to Pakistan will be launched by the end of 2015,” said Hojjatollah Qanimifard, Deputy Director in charge of investment at the National Iranian Oil Company.

“In a meeting in Tehran on Tuesday (June 8), the final approval on pipeline by the NIOC board of directors will be delivered to Pakistani officials and their letter of guarantee will be received,” he said in the comments on semi-official news agency ILNA.

The project is crucial for Pakistan to avert a growing energy crisis already causing severe electricity shortages in the country. The pipeline will connect Iran’s giant South Fars gas field with Balochistan and Sindh.

Iran has the world’s second-largest gas reserves after Russia. But sanctions by the West, political turmoil and construction delays have slowed its development as an exporter.

Dubbed the “peace pipeline,” the project has been planned since the 1990s and originally would have extended from Pakistan to India. However, India has been reluctant to join the project.

Under a deal signed in March, Pakistan will be allowed to charge a transit fee if the proposed pipeline is eventually extended to India.

The US has tried to discourage India and Pakistan from any deal with Iran because of Tehrans’ uranium enrichment activities and suspicions it wants to build nuclear weapons. Iran denies any such ambitions.

Iranian media reported on Sunday that the oil minister had ordered an end to talks with Anglo-Dutch Shell and Spain’s Repsol over the development of South Pars after the majors failed to meet ultimatums on their involvement.

Published in the Express Tribune, June 7^th, 2010.