Iran Oil Ministry Still Positive About Pakistan Gas Project

EghtesadOnline: Extended financial constraints in and procrastination by Islamabad notwithstanding, energy officials in Tehran are still hopeful that the long-delayed gas project with Pakistan will eventually see the light of day.

News ID: ۷۴۶۴۵۳

09 January 2019

In a statement on Monday, Amirhossein Zamaninia,  deputy oil minister for international affairs said the new government in Pakistan has made known its political will to broaden economic ties with Iran and is following up on Iran-Pakistan Gas Pipeline.

"Pakistan has set up two committees --- finance and sanctions --- to facilitate the process of gas import from Iran," Zamaninia was quoted as saying by Shana.

Oil ministers of the two countries are expected to discuss legal issues next month, the official said without elaboration, according to Financial Tribune.

Energy experts including Zamaninia believe it clearly is in Pakistan’s interest to buy gas from Iran rather than from other countries, say like Turkmenistan.

Pakistan has urged Iran to explain its interpretation of the new US economic sanctions, resulting in further delays in completing the IP gas pipeline project.

“The government took up the issue in a recent meeting with Iran’s Oil Ministry advisers in Islamabad. During the meeting we asked them to clarify their interpretation of the sanctions under which they claim that the restrictions do not affect the project,” Mobeen Saulat, Inter State Gas System managing director, told Pakistan media on Monday.

To put it simply, Islamabad says the venture cannot be completed due to the mounting US pressure, which can be justifiable to some extent.

However, Pakistan could have put an end to its procrastination and completed the pipeline on its territory in the 17-month period it had after Iran's nuclear deal took effect in early 2016 and before the US abandoned the historic international agreement and imposed new restrictions on Tehran last summer.

Needless to say, nothing was done in the period, not even a kilometer of pipeline was laid!

Reluctance Visible

“We cannot move ahead with the project due to the Iran sanctions. Iran has its own interpretation of the sanctions, so we have engaged them in the process to understand the [sanctions] interpretation,” the ISGS official said, adding that Pakistan cannot proceed with the multi-billion-dollar gas project (only) with Iran's verbal stance.

In 2016, Pakistan signed a deal with Qatar to buy liquefied natural gas from the Arab state for 15 years, casting further doubt on its intention to complete the long-delayed IP pipeline project.

The idea of a pipeline stretching from Iran's gas-rich southern regions to Pakistan and from there to India goes back to the 1950s.

But the first real move was made when the three sides signed a preliminary agreement in 1999 to build a gas pipeline.