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Pakistan – Iran Agree to Find Middle Ground

Posted by on Thursday, October 30, 2014, 10:43
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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.

Iran-Pakistan Gas Pipeline Project

Iran-Pakistan Gas Pipeline Project

“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.

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