Pakistan needs help funding gas pipeline

Aug. 17, 2011 at 6:42 AM   |   0 comments

ISLAMABAD, Pakistan, Aug. 17 (UPI) -- Pakistan may look to foreign investors to help pay for the construction of a pipeline carrying natural gas from Iran, an energy official said.

Tehran said it finished work on its section of a pipeline from the South Pars natural gas complex in the Persian Gulf. Pakistani officials said recently they were interested in starting work on their side of the border with the aim of completing the project by next year.

Mobin Saulat, a director at Pakistan's Inter State Gas Systems Ltd., told Bloomberg News that local companies would contribute around $210 million for the $1.3 billion project.

He said local contributions were vital because sanctions on Tehran made it difficult for foreign companies to work on Iranian projects.

Royal Dutch Shell and Spanish energy company Repsol last year pulled out of the South Pars gas project in the Persian Gulf in part because of sanctions pressure.

China National Petroleum, meanwhile, took over where French giant Total left off in 2009. CNPC and possibly Russian gas company Gazprom could move in as foreign investors for the Iranian natural gas pipeline, said Saulat.

"There was never a pipeline-specific sanction," he added.

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