Iran, Pakistan finalize gas pipeline agreement
Islamabad and Tehran have finalized a deal for the construction of a pipeline to pump Iranian natural gas to Pakistan.
The deal was signed by Reza Kasaeizadeh, managing director of the National Iranian Gas Export Company, and Pakistan's Petroleum Minister Naveed Qamar on Friday evening in Islamabad, IRNA reported.
The $7.6 billion project is crucial for Pakistan to avert a growing energy crisis already causing severe electricity shortages in the country of about 170 million.
"The project is now ready to enter into its implementation phase," Pakistan's Petroleum Ministry said in a statement.
Pakistan said the first gas is scheduled to flow by the end of 2014 and expects its total cost on the project to be $1.65 billion, funded through private and state capital.
Under the deal, Pakistan will import from Iran 750 million cubic feet of gas daily for 25 years, according to the Economic Times.
The amount could be increased to 1 billion cubic feet a day and the deal could be extended five years if needed, the ministry said.
The ministry said the imported gas would help generate about 5,000 MW of electricity.
The pipeline would connect Iran's South Fars gas field with Pakistan's southern Baluchistan and Sindh provinces.
Iran has the world's second-largest gas reserves after Russia.