Iran may cancel Peace Pipeline deal with Pakistan
Baku, Azerbaijan, Jan. 27
By Emil Ilgar – Trend:
Iran may cancel gas pipeline deal with Pakistan due to long-delayed construction works, the head of National Gas Company Hamid Reza Araqi told Mehr Jan. 27.
He said there are three scenarios on the table: continuance of the current situation; resuming negotiations to find a way for realization of the Iran-Pakistan pipeline, called Peace Pipeline; and finally, cancelling the deal.
Iran signed a deal with Pakistan during Mahmoud Ahmadinejad’s presidency to export 22 million cubic meters per day (mcm/d) of gas.
Tehran even offered a $500 million loan (a third of the pipeline’s cost) to Islamabad to start pipeline construction in Pakistan’s territory, but then withdrew arguing the financial problems due to sanctions.
Pakistan should have started Iranian gas imports in early 2015, but neither has it started construction of a pipeline, nor has Iran completed the IGAT7 project, aimed to transit South Pars field’s gas to the borders with Pakistan.
Iran should build a pipeline with a length of more than 180 km to complete the project.
Recently, Pakistan’s Petroleum Minister Shahid Khaqan Abbasi said that for implementation of the Peace Pipeline all of the sanctions on Iran should be removed. Some unilateral sanctions of the US on Iran, including the bans on deals with Iran using US dollars, still remain.
However, Mehr reported that Pakistan demands Iran to decrease the gas price as well.
Pakistan also claims that the gas price offered by Turkmenistan through TAPI pipeline is less than Iran’s price proposal.