Iran and Pakistan on Sunday formally signed an export deal which commits Iran to supplying Pakistan with natural gas from 2014.
The contract is the latest step in completing a multi-billion dollar gas pipeline between Iran and Pakistan within the next four years.
“This is a happy day,” Iran’s Deputy Oil Minister Javad Ouji told reporters at the contract signing ceremony in Tehran.
“After decades of negotiations, we are witnessing today the execution of the agreement... to export more than 21 million cubic metres of natural gas daily from 2014 to Pakistan,” he added.
He said that from Monday, Iran will start building the next 300-kilometre leg of the pipeline from the southeastern city of Iranshahr to the Pakistani border, through the Iranian port of Chabahar.
Iran has already constructed 907 kilometres of the pipeline between Asalooyeh, in southern Iran, and Iranshahr, which will carry natural gas from Iran’s giant South Pars field.
Federal Petroleum Secretary Kamran Lashari, who was present at the signing ceremony, said Islamabad will conduct a one-year feasibility study for building its section of the pipeline.
It will then “take three years for constructing the 700-kilometre pipeline” from the Iranian border to Nawabshah, he added.
Dubbed the ‘peace pipeline,’ the project was originally planned between Iran, Pakistan and India, but the latter pulled out of the project last year. Under a deal signed in March, Pakistan will be allowed to charge a transit fee if the proposed pipeline is eventually extended to India.
Pakistan plans to use the gas purchased from Iran for its power sector.
Ouji said that Iran, which has the second largest gas reserves in the world, currently produces 600 million cubic metres of natural gas, of which 430 to 440 million cubic metres is consumed domestically.
It plans to raise output to 900 million cubic metres over the next three years with the expansion of South Pars and hopes to further hike it to 1,100 million cubic metres by 2015.
The deal was overshadowed last week by the UN Security Council resolution on Iran which levied a fourth round of sanctions on the Islamic republic. The resolution imposed new sanctions on Iran and called for it to halt uranium enrichment.
Pakistan, however, said that the project of importing gas from Iran would not be affected by the sanctions.
“As far as our gas pipeline is concerned, that is purely a commercial agreement and is beyond the purview of this resolution,” Foreign Office spokesperson Abdul Basit told The Express Tribune.
He reiterated Pakistan’s commitment to supporting a “negotiated settlement” of the issues surrounding Iran’s nuclear programme. (Agencies with additional reporting by Sumera Khan)
Published in the Express Tribune, June 14th, 2010.
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