Pipeline to Pakistan still viable, Iran says

Islamabad has suggested it was backing away from long-planned project.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |   Nov. 26, 2014 at 6:12 AM
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TEHRAN, Nov. 26 (UPI) -- Iran's oil minister said Wednesday plans to extend a natural gas pipeline to Pakistan were still on the table despite growing concerns from Islamabad.

"Pakistan has signed a deal to import 760 million cubic meters of natural gas per day from Iran and by the beginning of 2015, it should start receiving this amount of gas according to agreement," Oil Minister Bijan Zanganeh said.

Once dubbed the Peace Pipeline, and including India as the terminal country, Iran has long held out its gas reserves as an opportunity for Eastern trading partners. Washington and its Western allies, however, have backed a rival project that would stretch from one of the world's largest natural gas fields in Turkmenistan through Afghanistan, Pakistan and India.

For Pakistan, sanctions targeting Iran's energy sector meant it was time to reconsider the pipeline project.

Government officials told Pakistani media outlets they were declaring force majeure on the pipeline, meaning it was handicapped by circumstances beyond its control. Furthermore, sanctions imposed on Iran meant it was not possible to secure the necessary funding to build the pipeline on Pakistan's side of the border.

According to Zangeneh, a clause in the gas pipeline contract means Pakistan would pay at least $3 million to Iran for project delays.

The oil minister said Iran was willing to consider amending the country to facilitate the project's development.

"Whenever the Pakistanis construct their domestic gas pipeline network, Iran would start gas delivery to its eastern neighbor," he said.

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