Publishe Date: 4:36 PM - 4/9/2014 | Print

Iran Almost Abandons IP Gas Pipeline Project

Economy - Tehran is all set to punish Islamabad for its failure to lay down the 781-kilometer-long pipeline in Pakistan’s territory under the Iran-Pakistan (IP) gas pipeline by initiating a new project of Iran-Oman-India (IOI) undersea gas pipeline, a senior Pakistani official at the Ministry of Petroleum and Natural Resources said.

Indian Foreign Minister Salman Khurshid, Omani Minister for Foreign Affairs Yousuf bin Alawi bin Abdullah and Iranian Foreign Minister Javad Zarif met in New Delhi on February 28, 2014 and discussed the project of deep sea IOI gas line at estimated cost of $4-5bln by putting aside Pakistan, the International News reported.

However, when contacted, Pakistani Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi said, “We have no news of any such replacement of project.”

Mobin Saulat, the Managing Director of the Pakistani Inter-State Gas System (ISGS), when contacted, also expressed ignorance about the news.

The top official said that Iran has taken this step after Pakistan failed to fulfill its obligations on time. Under the agreement, Pakistan is bound to lay down the 781-kilometre pipeline from MP250, a point on the Pak-Iran border to Nawabshah to meet the deadline of December 2014, but on the ground there is no activity for laying down the infrastructure to this effect.

Under the agreement, Pakistan was to get 750 million cubic feet of gas per day (mcfd) from January 1, 2015. Later, the gas supply from Iran was to be increased to 1 billion cubic feet gas per day (bcfd). Now the import of gas under the IP project seems a non-starter. If Pakistan fails to meet its obligation, then after the deadline, it will have to pay to Iran the huge penalty of almost $200 million a month.

Early in March, member of the Iranian Parliament’s Energy Commission Jalil Jafari Boneh Khalkhal criticized Pakistan for its repeated delays in commissioning the IP gas pipeline, stressing that the project is no more beneficial to Tehran .

Speaking to FNA at the time, Jafari Boneh Khalkhal pointed to long delays in accomplishment of the Pakistani side of the pipeline, and said, “Owing to the existing conditions continuing this project will no more be in the interest of Iran as it has no more economic justification.”

Jafari Boneh Khalkhal’s remarks came after Khaqan Abbasi said that it was not possible to work on the pipeline due to sanctions against Iran.

The MP noted that although Pakistan is a Muslim country and Iran’s neighbor, it is not complying with its commitments and the experience has shown that it will not pay good money to Iran as it is not ready to pay the costs for the construction of its share of the IP gas pipeline.

Iran has already built 900 kilometers of the pipeline on its own soil and is waiting for the 781-kilometer Pakistani side of the pipeline to be constructed.

The IP pipeline is designed to help Pakistan overcome its growing energy needs at a time when the country of over 180 million people is grappling with serious energy shortages.
 

Tags: gas -
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