Iran, Pakistan to set new IP project deadline

Tehran and Islamabad have agreed to set a new timeframe for the implementation of the under-construction multi-billion-dollar pipeline projected to carry natural gas from Iran to its eastern neighbor.

The two sides have decided the IP (Iran-Pakistan) gas pipeline will not come on stream by December 2014, to fix a new deadline for the project based on the realities on the ground, and to sort out other important issues, including financing, construction period as well as appointment of the engineering, procurement and construction contractor, a senior Pakistani energy official told English-language newspaper The News on Wednesday.

The unnamed official from Pakistan’s Ministry of Petroleum and Natural Resources added that the agreement was reached during a meeting between Iranian Oil Minister Bijan Namdar Zanganeh and his Pakistani counterpart Shahid Khaqan Abbasi in Tehran on December 9.

He further noted that experts from Pakistan’s Inter-State Gas Company (ISGC) and the National Iranian Gas Exports Company (NIGEC) will discuss the aforementioned issues later this month.

According to the original agreement sealed between Iran and Pakistan, the first Iranian gas delivery to Pakistan should have started by December 31, 2014.

The two countries are also responsible for the completion of the pipeline project within their territories, and if Pakistan does not fulfill its obligation to complete the pipeline on its side by the end of 2014, it will have to pay a daily penalty of $1 million to Iran until completion.

Iran has agreed not to penalize Pakistan for missing the deadline.

The United States has long been threatening Pakistan with economic sanctions if Islamabad goes ahead with the pipeline project.

However, the government of Pakistani Prime Minister Nawaz Sharif has made it clear that addressing the country’s longstanding energy problems will be its top priority, and it has no plans to reverse the decision on the completion of IP pipeline.

Iran has already built 900 kilometers of the pipeline on its own soil and is waiting for the 700-kilometer Pakistani side of the pipeline to be constructed.

The IP pipeline is designed to help Pakistan overcome its growing energy needs at a time when the country of over 180 million people is grappling with serious energy shortages.