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$10b worth 2,600-km IP gas project: Iran holds out an olive branch to Pakistan on supplies payments

$10b worth 2,600-km IP gas project: Iran holds out an olive branch to Pakistan on supplies payments

ISLAMABAD: Following much delay in the its execution, Iran has come up with a revised agreement on a gas pipeline project with Pakistan, proposing that Pakistan should engage a third party to pay for gas to be transported from the country as international banks are reluctant to process transactions due to economic sanctions slapped by the US and the EU.

Iranian Minister of Economic Affairs and Finance Dr Ali Taieb Nia extended the proposal during a meeting with Petroleum and Natural Resources Minister Shahid Khaqan Abbasi.

According to reports, an Iranian team is expected to visit to Pakistan to finalise the revised plan for the pipeline project and the proposal for payments through third party.

Iran has already completed its part of the pipeline and expects Pakistan to meet the commitment and complete work swiftly. Nia expressed the desire that gas flow to Pakistan should start soon so that the latter could be able to tackle the crippling energy crisis.

The Iranian minister informed Abbasi that talks with the international community had been successful and sanctions would be removed very soon. With the removal of restrictions, Iran’s trade volume and economic relations with its neighbours would improve further, he hoped.

However, Pakistan insists that Iranian negotiators should seek special exemption for the project from the sanctions while reaching a nuclear deal with the US and other world powers.

Abbasi suggested that the international embargo on Iran had prevented Pakistan from pushing ahead with the pipeline project on its territory. Despite best efforts, he said, international contractors and equipment suppliers were not willing to be part of the scheme. He said the government was now planning to complete the project in two phases – first, a liquefied natural gas (LNG) terminal would be built at the Gwadar Port and then a 42-inch pipeline spread over 700-km would be laid from Gwadar to Nawabshah for onward transmission of gas to northern parts of the country.

The government is engaged in negotiations with Chinese companies for construction of pipeline and work on a 70-km stretch of the pipeline from Gwadar to the Iranian border will be undertaken by Pakistani companies. “This project is expected to start in the near future,” he said.