Prospects Fade for Gas Export to Pakistan

EghtesadOnline: An official at the National Iranian Oil Company says Iran is no longer concerned with gas export to Pakistan as Islamabad has shown little if any determination to complete the long-delayed Iran-Pakistan Pipeline project.

News ID: ۷۴۰۳۳۱

12 March 2017

"We are ready to start gas supply, but this is not a priority for Pakistan. It is not particularly important for us either," said Amirhossein Zamaninia, NIOC's deputy for international affairs, ILNA reported on Saturday.

The latest criticism of Pakistani policy of procrastination comes against a backdrop of statements by officials in Islamabad who assert that their government is keen on completing   construction of the pipeline on its side of the border.

Last week, state-owned news agency APP quoted a source at Pakistan's Ministry of Petroleum and Natural Resources as saying that Islamabad "is ready to complete its part of the gas pipeline within 30 months once restrictions are lifted." The report did not elaborate, according to Financial Tribune.

But Zamaninia does not see that happening anytime soon. "The gas export pipeline to Pakistan is up in the air."

Pakistan has largely blamed financial woes and international restrictions in doing business with Iran for the extended delays in laying the pipeline on its side, though sanctions were lifted more than a year ago.

Initially named Iran-Pakistan-India Gas Pipeline, the ambitious project to deliver natural gas from Iran's South Pars Gas Field in the Persian Gulf all the way to India through Pakistan was unveiled with much fanfare over a decade ago, but has since faced numerous financial and political roadblocks.

In 2008, India's name was dropped after the country backed out on the project over pricing and security issues. The pipeline's construction was due to commence in 2012 and be completed in two years. But it was again put off after tighter economic sanctions were imposed on Iran over its nuclear program.

Tehran is also pondering about supplying natural gas directly to India through an ambitious subsea pipeline, according to Zamaninia.

"It is still in theory and a few Indian companies are weighing up its feasibility," he noted.

--- Oil Tenders

Regarding tendering new oil and gas development projects, Zamaninia said BP Plc and other multinationals who have not submitted their documents to the NIOC in the pre-qualification round will not be allowed to compete.

"BP is among the big names in the petroleum industry and cannot be overlooked easily. Nonetheless the NIOC has its own regulations for tenders and stick to it."

Iran has certified 29 companies for bidding in its new energy projects and the NIOC is compiling a second list of firms qualified for participation in its tenders. The list is anticipated to include more European names, but BP has reportedly opted out of the bidding because of concerns over renewed tensions between Tehran and Washington and the prospect of new economic sanctions against Iran.

European oil majors such as France’s Total, Royal Dutch Shell, Eni, Maersk, OMV and Schlumberger have already got the green light for bidding.

According to Karim Zeibodi, head of a special department at NIOC that oversees performance of reservoirs, BP has not submitted documents, but "they have held talks with Iranian energy officials since the lifting of sanctions in January 2016."