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Iran not to suspend gas pipeline project, delay to cost $3m/day to Pakistan

Iran not to suspend gas pipeline project, delay to cost $3m/day to Pakistan

ISLAMABAD: Iranian Oil Minister Bijan Namdar Zanganeh has said that the Iranian government will not suspend gas export contract with Pakistan. The gas contract signed between Tehran and Islamabad requires the Pakistani government to pay $3 million worth of compensation to Iran for each day of delay as of the beginning of 2015.

The minister said that Iran was ready to begin gas export to Islamabad. “Iran has almost completed the establishment of the Iran-Pakistan pipeline in its territory and is ready to export gas to Pakistan as soon as the country builds its own section of the pipeline,” he said. The minister noted that Iran’s gas output during March 21-November 21, 2014 has increased by 100 mcm year-on-year and amounted to more than 600 mcm per day.

Earlier, Zanganeh had said that Iran was committed to its gas contract with Pakistan, urging the country to show the same commitment. Islamabad would initially receive 20 mcm of gas per day after completing the remaining section of the Iran-Pakistan pipeline in its territory.
Following the Iranian Oil Ministry’s ultimatums to Pakistan, demanding the country to complete the project on time, Pakistani Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi travelled to Iran last week to extend the deadline. Earlier, Deputy Oil Minister Ali Majedi said that Iran has spent $2 billion on the establishment of the pipeline and would invest another $1 billion to complete the project.

Majedi noted that even if the Pakistani government were to appoint the project’s contractor right now, it would only be able to complete the project in about four years.