Pakistan, Iran Agree to Reach Middle Ground for Implementation of Pipeline Project

Pakistan and Iran have agreed to look for a middle ground to implement the Iran-Pakistan gas pipeline.

The decision was taken during the meeting between the two parties held on Tuesday in Tehran, Pakistani newspaper Express Tribune reported.

“I am hopeful that both parties can find a consolidated solution for the project despite threats of sanctions,” Pakistan’s Federal Minister for Petroleum Shahid Khaqan Abbasi, told the newspaper.

During the meeting Pakistani officials informed the Iranians that US sanction was the main hurdle for implementation of the pipeline project and construction on Pakistani side of the pipeline can only begin if the sanctions are lifted.

Express Tribune reported that a second proposal was also put forward according to which 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 Iran-Pakistan 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.

“Iranian side would respond to Pakistani side after evaluating these proposals,” sources told Express Tribune.

Iran has already built its 900-kilometer share of the pipeline on its own soil and is waiting for the 700-kilometer Pakistani side of the pipeline to be built. On June 5, 2009 Inter State Gas System of Pakistan and National Iranian Oil Company signed an agreement, which envisaged the first flow of gas to Pakistan to commence by December 31, 2014.