Cabinet body okays IP project’s 1st phase

The Cabinet Committee on Energy (CCoE) on Friday gave the nod to complete the first phase of the 80-kilometre Iran-Pakistan (IP) gas pipeline project within the country’s territory.

According to sources, the pipeline would be laid from the Iranian border to Gwadar and take a year to complete.
It has been estimated that the first phase of the project would cost $158 million.

Government sources said the funds for the project would be provided from the Gas Infrastructure Development Cess (GIDC).

A statement issued by the energy ministry’s petroleum division read that the CCoE approved the recommendations of the Ministerial Oversight Committee for the IP project formed by the interim premier in September last year.

The project will be executed by the Interstate Gas Systems (Pvt) Ltd.

The statement continued that all the concerned divisions gave positive approval to go ahead with the project to ensure the supply of gas to the people of Pakistan for meeting the growing energy needs of the country.

“This will not only increase Pakistan's energy security but also boost the confidence of local industries, which will be ensured with better supply of gas,” it added.

“This [project] will increase financial activities in the province of Balochistan that will help in the economic development of Pakistan,” the statement concluded.

In reality, the country has approved the project to avoid a looming $18 billion penalty.

According to reports, Iran had granted an extension in the deadline of the IP gas pipeline project by 180 days until September 2024. Tehran had granted this extension in a bid to avoid litigation in an international court.

Pakistan has decided to proceed with the construction of the IP gas pipeline within its borders to satisfy Tehran, despite the sanctions imposed by the US.

Iran claims to have already spent $2 billion to complete its part of the pipeline within its territory. In contrast, Pakistan has not even commenced construction.

Previously, constructing the 80- kilometre portion of the IP pipeline project was part of the LNG Gwadar Pipeline project, intended to connect the port with other parts of the country.

It was agreed that Pakistan could construct this portion if relations between Tehran and Washington normalised and Islamabad was granted a waiver.

However, because of the mounting pressure from Iran, Pakistan has now opted to build the portion of the IP gas pipeline project within its territory.