Pakistan and Iran to fast track gas pipeline

Pakistan and Iran have decided to fast track implementation of the gas pipeline and formulate a road map to move ahead on this much delayed project. While Iran has almost completed its share of the pipeline, Pakistan is cash strapped and has asked Iran to pay up $ 2 billion for the pipeline. However, the government has the design for the pipeline ready and could start the project if funds are available.

An official statement on Tuesday said this was one of the important outcomes of a meeting between Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi who travelled to Tehran to meet his Iranian counterpart Bijan Namdar Zangeneh on Monday. It was also agreed that a meeting will be held shortly between the experts from both sides to review parameters for accelerating work on the pipeline.

Mr. Abbasi accompanied by Abid Saeed, Secretary, Petroleum and Mobin Saulat head of the Pakistan Interstate State Gas System was in Tehran for discussions. Mr. Abbasi reiterated Pakistan’s assurance to fulfill its contractual obligation as the project is of vital importance to meet the energy needs of the country. The two ministers also reviewed in detail bilateral cooperation and emphasised the need to put greater focus on economic relations.

While Pakistan is hoping that a US deal with Iran would lift the sanctions on that country, it does not seem to be the case.

Earlier, Sartaj Aziz, Pakistan Prime Minister's Advisor on National Security and Foreign Affairs had met Dr. Muhammad Javad Zarif, Iran Foreign Minister in Tehran during the 21st Meeting of the Council of Ministers of the ten member Economic Cooperation Organization. It was agreed that comprehensive technical commercial proposals on the Iran Pakistan gas pipeline would be discussed in Tehran between Inter-State Gas System Ltd of Pakistan and the Iranian nominated company – Tadbir Energy Gaspar Iranian Co. in December.

Pakistan is looking to renegotiate the price of gas and also the heavy penalty clauses in the agreement, in case it doesn’t complete the project by the stipulated time frame - December 2014. The project received a setback after Iran said it would not go ahead with the project but Pakistan has been making efforts to get it back on track.

The US sanctions also means that few will fund the pipeline which is why Pakistan had demanded that Iran pay for its share of the project.