Iran Unable to Provide $500 mn to Pakistan for Gas Pipeline

Iran has expressed its inability to provide $500 million supplier’s credit to Pakistan for the Iran-Pakistan (IP) gas pipeline citing financial constraints, reports The News.

However, Pakistan’s oil minister Shahid Khaqan Abbasi reiterated that both countries remain committed to the project,

Keeping in view the new ground realities, both countries have decided to revise the parameters to materialise the project as the commitment to complete the project is very much there on both sides, Federal Minister Shahid Khaqan Abbasi, told a press briefing in Islamabad on Thursday, reports The News.

According to the newspaper, materialisation of the IP gas pipeline is linked to the lifting of US sanctions on Iran, as easing out of curbs will enable Pakistan to arrange funding required for laying down the 781-kilometre-long pipeline in its territory.

Both sides have decided to constitute a working group which would re-establish in two months the new parameters for the projects, including a new time-frame and other important issues involving financing of pipeline to be laid down in the territory of Pakistan, construction period and appointment of EPC contractor and compressor equipment from international companies, adds The News.

Iranians have now agreed to not penalise Pakistan for not meeting the deadline, but also agreed to fix a new deadline based on ground realities. As per agreement the first gas delivery to Pakistan should start by Dec 31, 2014.

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