No gas price renegotiation with Pakistan

Iran Oil Minister Rostam Qasemi has dismissed any reduction in the price of natural gas the country has agreed to deliver to Pakistan as of next year.

“The Pakistani government has not submitted any request to Iran for a gas price discount,” Qasemi said on Sunday.

The Iranian minister was reacting to Pakistani Prime Minister’s Adviser on Petroleum Asim Hussain who said on Saturday that Islamabad has asked Iran to reduce the price of gas to Pakistan.

“We are activating the price renegotiation clause of the [bilateral gas sales and purchase] agreement (GSPA),” the Pakistan newspaper Dawn quoted Hussain as saying.

Qasemi said, “The contract for natural gas sales to Pakistan has already been finalized,” adding that Iran would respect all its gas obligations vis-à-vis the Pakistani government.

“The construction of the Pakistani section of the gas pipeline will start with Iran’s direct investment soon,” Qasemi stated.

Pakistani firms Frontier Works Organization (FWO), Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines Limited (SNGPL) will also take part in the construction of the gas pipeline.

Tadbir Energy Development Group will reportedly undertake all engineering procurement and construction work for the first segment of the project, which starts from the Iran-Pakistan border and costs around USD250 million.

The Iranian firm will also carry out the second segment of the project, and extend the financing later to USD500 million.

The remaining amount is expected to be generated through Pakistan’s Gas Infrastructure Development Cess (GIDC).

The Iran-Pakistan gas pipeline, projected to cost USD1.2-1.5 billion, would enable the export of 21.5 million cubic meters of Iranian natural gas to Pakistan on a daily basis.

Iran has already constructed more than 900 kilometers of the pipeline on its soil.