IP gas pipeline: Pakistan, Iran agree to find middle ground

Consolidated solution likely for the project.

Our Correspondent October 29, 2014

ISLAMABAD: Pakistan and Iran authorities, in a meeting held in Tehran on Tuesday, have reached an understanding to look for a middle ground to implement the Iran-Pakistan (IP) gas pipeline project amid threats of possible sanctions by the US.

“I am hopeful that both parties can find a consolidated solution for the project despite threats of sanctions,” said Federal Minister for Petroleum Shahid Khaqan Abbasi, while talking to The Express Tribune.

According to sources, the Pakistani delegation, led by Abbasi, informed the Iranian side that the US sanction on Iran was the main hurdle in materialising the IP pipeline project.

The Economic Coordination Committee (ECC) recently approved laying an LNG pipeline from Gwadar to Nawabshah and setting up an LNG terminal at the Gwadar port.

Sources said the Pakistani delegation informed the Iranians that they had a plan to construct the pipeline but it would only happen if the sanctions are lifted.

Replying to a question, petroleum minister said that it [LNG pipeline] was a separate project and had no links with IP gas pipeline project.

According to the second proposal, Pakistani authorities would offer an alternative plan of gas import to the Iranian authorities by converting natural gas into LNG – a move that will lead to the shelving of the IP project.

Under this plan, Iran would convert natural gas into LNG and then export it to Pakistan by using the terminal facility of Oman which has already signed a deal with Iran for the purchase of around $60 billion worth of natural gas over the next 25 years.

Around 50% of the total amount of the gas exported to Oman would be delivered to Japan, South Korea and India.

“Iranian side would respond to Pakistani side after evaluating these proposals,” sources said.

According to the gas sales purchase agreement, Pakistan was to commission the project on December 2014 but was unable to start construction on its portion of the pipeline due to threats of US sanctions. Pakistan is making all out efforts to avoid penalty by offering alternate plans to Iran.

Published in The Express Tribune, October 30th, 2014.

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sam | 7 years ago | Reply

This is totally absurd how is Oman going to get Iranian gas when sanctions will apply to Oman as well getting cheap natural gas from Iran would not only help in reducing the cost of electricity and help Pakistan's economy but will also be beneficial for the environment and mitigating climate change and carbon reduction inf act Pakistan should talk to its friend USA regarding the loss it is incurring due to sanctions on Iran and its impact on Pakistan's economy and seek compensation in terms of technical assistance for realizing Pakistan,s own potential of tight gas and its Shale reserves and seek LNG at discounted rates as a short term measure.Pakistan should setup its own LNG Plant if every thing goes right we may be able to export LNG

(How is Turkey getting around these sanctions its still buying Iranian oil and Gas so is India )

Hedgefunder | 7 years ago | Reply

What middle ground ? This is another trick to get out of paying penalties for non compliance of the original agreement, while Iranians have already completed their side of pipeline at their costs !

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