Tehran is to negotiate the halted Iran-Pakistan (IP) gas pipeline project during Iranian President, Hassan Rouhani’s visit to Islamabad at the end of March, Business Standard reported. After having commissioned the project in December 2014, the two countries expressed their commitments to complete the pipeline after the economic sanctions against Iran are lifted, Tribune informed.
Given the contracted obligations, Pakistan would pay millions of dollars in penalty if the project is further delayed in the post-sanction environment. However, there remain uncertainties about the gas project as it was reported that the US and the EU have been trying to halt the plans. The western powers have been reported to be in support of other Middle Eastern countries such as Saudi Arabia and Qatar to ensure their presence in Pakistan and their dominance on the Pakistani gas market, as Tribune wrote in an earlier report. Islamabad had recently signed a $15b LNG deal with Doha that would further sustain country’s dominance in the South Asian region and pose further obstacles to Iran’s plans for expansion in Pakistan.
Amid delays with the IP pipeline, Islamabad had previously designed an alternative $2b gas pipeline project – LNG Gwadar pipeline. However, it was also stopped as the Pakistani Finance Ministry had been reluctant to provide $300m for co-financing of the launch. The government is now negotiating a commercial deal with a Chinese company for kicking off work on this project by the end of March.