Iran minister says Pakistan gas contract probably dead

Published: October 30, 2013
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Iran has already spent hundreds of millions of dollars and nearly completed the 900 km (560 mile) pipeline to the Pakistan border. PHOTO: AFP

Iran has already spent hundreds of millions of dollars and nearly completed the 900 km (560 mile) pipeline to the Pakistan border. PHOTO: AFP

DUBAI: Iran will probably abandon a multi-billion-dollar contract to supply gas to Pakistan, the semi-official Fars news agency reported Iran’s oil minister as saying on Wednesday.

“The contract for supplying gas to Pakistan is likely to be annulled,” Fars quoted Iranian Oil Minister Bijan Namdar Zanganeh as saying on the sidelines of a gas forum in Tehran on Wednesday. He gave no other details, Fars said.

Under the contract, Iran is supposed to export 21.5 million cubic meters of gas per day to Pakistan from next year.

Dubbed the “peace pipeline”, the $7.5 billion project has faced repeated delays since it was conceived in the 1990s to connect Iran’s giant South Pars gas field to Pakistan and India.

Iran has already spent hundreds of millions of dollars and nearly completed the 900 km (560 mile) pipeline to the Pakistan border.

Pakistan, although suffering from severe gas shortages, has made little progress on its part of the line due to a lack of funds and warnings it could be in violation of US sanctions on Iran.

Zanganeh’s comments came two days after his Pakistani counterpart, Shahid Khaqan Abbasi, was quoted by local media as saying that Pakistan risked being punished by sanctions on Iran if it goes ahead with the much-maligned project.

Until now Iranian officials have insisted that the project to supply Islamabad will be completed.

Exasperated by the lack of work across the border, Iran has even offered to build Pakistan’s 780-kilometre section and provide multi-million dollar loans to help pay for it, according to Iranian media reports.

In contrast to his predecessor, Zanganeh has been open about the problems faced by Iran’s energy sector since he took office in August.

On October 1 he warned that Iran faced serious gas shortages of its own because of slow progress in raising production from South Pars, the field that is supposed to fill the pipeline.

India quit the project in 2009, citing costs and security issues, a year after it signed a nuclear deal with Washington.

Iran sits on the world’s largest reserves of gas. But Western sanctions aimed at stopping Iran’s disputed nuclear activities have hindered its gas production growth, while the United States has pressured potential buyers to find other suppliers.

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Reader Comments (27)

  • unbelievable
    Oct 30, 2013 - 8:45PM

    Like shooting a dead horse – probably necessary given that few in Pakistan have figured out that when a horse stops breathing it’s dead.

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  • S
    Oct 30, 2013 - 8:58PM

    Sad news

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  • Khalq e Khuda
    Oct 30, 2013 - 9:23PM

    @ET: the Pakistani section of pipeline is 1.5 billion dollars so I think even the whole project couldn’t possibly be $7.5 billion.

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  • Failedstate
    Oct 30, 2013 - 9:29PM

    Saudi has a hand behind this. Thank them.

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  • Animal Farm - Desi
    Oct 30, 2013 - 9:41PM

    Spineless Pakistani leadership not being able to set its priorities right…

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  • Awais
    Oct 30, 2013 - 9:44PM

    What could we have expected from Sheikh Nawaz Sharif Al-Saud?

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  • Indra
    Oct 30, 2013 - 10:07PM

    Isme RSS ka haith hain.Hindu Zionists and Israeli lobbyists have done this..

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  • Oct 30, 2013 - 10:18PM

    The energy experts had already expressed reservations about the price of Iranian Gas. It is a good news that people are safe now from another IPP,s like price bomb.Five southern districts of KP are very rich with gas and oil reserves but only twenty percent of gas reserves been taped in three districts.

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  • unbelievable
    Oct 30, 2013 - 10:22PM

    @Khalq e Khuda:

    @ET: the Pakistani section of pipeline
    is 1.5 billion dollars so I think even
    the whole project couldn’t possibly be
    $7.5 billion.

    Valid point but this is a Reuters article not something ET wrote. It’s not surprising that IP cost still vary dramatically from article to article – no one ever did an economic feasibility study, no one ever got a real bid from a contractor and cost estimates appear to be something that politicians pull out of their pockets. Just one more reason that IP has no substance.

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  • Girish
    Oct 30, 2013 - 10:22PM

    According to agreement, iran can penalize pakistan for there non commitment.
    Iranian leaders lost faith in pakistan and there politicians.Only way to recover iranian investmet is to heafty penalize pakistan.

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  • Indra
    Oct 30, 2013 - 10:23PM

    Pakistan as usual has shown its true colors by backstabbing Iran.I hope the shias in Pakistan call for a better life and a new Shia state of the name farsistan

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  • ModiFied
    Oct 30, 2013 - 10:27PM

    Mian Sahab has been trumpeting of good neighborly relations. Iran, India and Afghanistan all have poor relations with Pakistan now. Chinese relations are good only on paper and some defense related areas. My assessment is that during Man Sahab’s tenure all these relations will nose dive even further.

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  • Hafiz
    Oct 30, 2013 - 10:40PM

    pakis should stop begging.

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  • Wali
    Oct 30, 2013 - 10:44PM

    It is disappointing given that Pakistan has made a commitment on this project without ever really commiting to the project. However, it may still have some ironic blessing when the gas to supplied is linked to oil price in te international market and was to be sold more than 4 times the price if gas in open market.

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  • salman
    Oct 30, 2013 - 10:58PM

    If no gas pipeline project what will Pakistan get ? India got nuke deal as a compensation while Pakistan hmmm never mind, this country is destined to doomed anyways

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  • B
    Oct 30, 2013 - 11:06PM

    India did the right thing at the right time to come out of this ghost deal. If not, it would have wasted a lot of money.

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  • jamshed kharian-pak
    Oct 30, 2013 - 11:29PM

    Prime Minister Mian Nawaz Sharif’s Usa trip is apparently very successeful! Ir Pakistan gains 883000 legalisations of Pakistanis workres in ksa Aabia but soldeout IP Iran-Pakistan Pipeline with tremendus developpent in Pakistan usa not from the region & Saudi Arabian govt will change like all other Arab Dictators sad news for the peoples of Ir Pakistan

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  • Bakhtiyar Ghazi Khan
    Oct 30, 2013 - 11:54PM

    Nothing is set in stone yet. US sanctions and Gulf pressure have delayed the project, but there is a chance for China to enter the project. Pakistan may be able to get a better deal for gas by including China.

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  • Mumtaz
    Oct 31, 2013 - 12:40AM

    Chinese workers are killed in pakistan.What assurance that chinese can benifit on a very violent terittory of baluchistan where pipeline will pass through.Iran pipeline project is like painting on a water.

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  • Zen
    Oct 31, 2013 - 1:28AM

    @Bakhtiyar Ghazi Khan:
    Do you think anyone in Pakistan will go against KSA. Stop your day dreaming.

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  • Rex Minor
    Oct 31, 2013 - 1:46AM

    Democracy is a device that ensures we shall be governed no better than we deserve.said George Bernard Shaw! Where is the newly elected Prime Minister of the country today?
    Why lament about the shortage of leadership in the country, from Bhutto-Zardari to Sharif Bros. and in between the military supremos, Pakistan never had anyone else.

    Rex Minor

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  • Fahad
    Oct 31, 2013 - 1:51AM

    Read complete article” Iran faces gas shortage in its own”. If Pakistan completes its part and Iran will not fulfill to provide gas then the Pakistan has to pay double price for that! Will face simultaneously gas shortage and loan interest taken into account for building up the gas pipeline and So my opinion to government is that explore and work out the gas fields which are present in their own area.

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  • Oct 31, 2013 - 6:38AM

    This project was still born. It goes back to the age old saying “‘ you can never serve two masters at the same moment”. As of now the Saudis are Pakistan’s masters and Pakistan has no choice but listen to the masters dictates. Saudi Arabia is vehemently against anything and everything that is Iran. Unfortunately enough, this is the end result that any nation confronts when it take orders from a foreign capital. There is another surprise for Pakistan lurking behind the walls of the Forbidden City in Beijing. It will rear its head sooner than later. People of Pakistan lose once again.

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  • Mitha Sadruddin
    Oct 31, 2013 - 6:41AM

    a very fragile country in decision making, a docile approach,playing very safe though its citizens are killed it’s sovereignty crushed daily, it has no impact, it a shy county with no political leader worth salt. the destiny darkness all will disappear. ,

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  • Aschraful Makhlooq
    Oct 31, 2013 - 11:44AM

    US’ hidden pressure is working excellently and most effectively.Very well done US and never let Pakistan stand on its own feet to get economical prosperity and sovereignty……

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  • unbelievable
    Oct 31, 2013 - 4:46PM

    @Aschraful Makhlooq:

    US’ hidden pressure is working
    excellently

    Nothing hidden about sanctions and BTW those sanctions are also UN sanctions.

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  • Aschraful Makhlooq
    Nov 4, 2013 - 11:30AM

    “@unbelievable:Nothing hidden about sanctions and BTW those sanctions are also UN sanctions”
    If this is so then why India and other some Asian countries are receiving oil and gas from Iran and why only Pakistan is not allowed and as far as UNO is concerned then UNO is strongly under US’ pressure?????

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