Controversial project: Iran to fund gas pipeline construction in Pakistan

President Zardari to finalise key agreement during visit to Tehran on Dec 7.

Kamran Yousaf December 04, 2012


President Asif Ali Zardari will finalise a key agreement to help finance the multi-billion dollar Iran-Pakistan gas pipeline project during an official visit to Tehran later this week, officials said.

Iran has almost completed work on the controversial pipeline on its side of the border while Pakistan struggles to complete the pipeline – running into difficulty over reluctant investors who fear they could be hit by US sanctions.

Iran’s offer to fund the construction of the pipeline on the Pakistani side arose when both China and Russia backed out of earlier commitments to fund the pipeline. Under the proposed inter-governmental cooperation agreement, Tehran is ready to provide $250 million in loans to build the pipeline on the Pakistani side of the border, while another $250 million is also expected to be provided by Iran’s commercial banks.

Meanwhile, in another sign of progress on the Iran-Pakistan gas pipeline front, Chairman Senate Defence and Defence Production Committee Senator Mushahid Hussain Sayed confirmed that President Asif Ali Zardari will be undertaking a visit to Tehran on December 7, after he held talks with a visiting delegation from Iran’s parliamentary committee on national security and foreign policy headed by Alaeddin Borojourdi.

Mushahid Hussain

At a joint news conference with Borojourdi, Mushahid said the main purpose of the president’s visit will be to finalise an agreement that would provide necessary financing for the Iran-Pakistan pipeline project.

US pressure

The US has been pressuring Islamabad to altogether scrap the project because of Iran’s controversial nuclear programme. However, Senator Mushahid said on Monday that Pakistan rejected US pressure as it considered the Iran-Pakistan gas pipeline project vital to efforts in overcoming the energy crisis it faces.

Talking to the media, Borojourdi also said Iran was committed to the energy pipeline with Pakistan, and also offered to help construct it since, he said, that the project from the Iranian side was almost completed. The Iranian lawmaker also indicated that a significant development in the project was expected during President Zardari’s upcoming visit.

Afghan endgame

During his visit, Zardari is also likely to discuss the current regional security situation including the recent decision by Pakistan to release Taliban prisoners from its custody in a bid to advance the Afghan peace process.


Mushahid said Pakistan and Iran shared common views on the reconciliation process in Afghanistan.

“It is imperative that Pakistan and Iran work closely in the wake of the US pullout from Afghanistan by 2014,” said Mushahid. His Iranian counterpart endorsed the view and acknowledged Pakistan’s crucial role in the reconciliation process.

In a show of support for Iran, Mushahid also told the visiting Iranian delegation that Pakistan rejected any double standards on the nuclear issue and strongly feels that the standoff with Iran on the nuclear issue should be resolved peacefully, without threat or use of force.

The Senate defence committee supported the right of Iran to undertake nuclear research and enrichment for peaceful purposes in accordance with IAEA safeguards, said the senator.

Borojourdi insisted that Iran has no intention of building the atomic bomb, but he added that it will certainly exercise its right to do nuclear research and development for peaceful purposes.

Published in The Express Tribune, December 4th, 2012.


fasmik | 9 years ago | Reply

Its a standoff on prices and nothing else. Iran demands much higher price and we aint willing to pay it.

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