ISLAMABAD, Pakistan, March 15 (UPI) -- A Chinese banking consortium said it was stepping away from a natural gas pipeline planned from Iran to Pakistan, the Pakistani government acknowledged.
Iran has started work on its section of a pipeline that would stretch from the South Pars gas field in the Persian Gulf to Pakistan. Both sides have expressed interest in the project, though the United States has stated opposition given the potential economic benefits for Iran.
Delegates at a meeting led by Pakistani Finance Minister Abdul Hafeez Shaikh were told that a banking consortium led by the Industrial and Commercial Bank of China has "run away from the project," reports Pakistani newspaper Dawn.
Pakistan expects by June to have a route survey completed in its territory. Bidders would then be invited to try for a construction contract the Pakistani newspaper reports would be valued at around $1.5 billion.
Washington backs a rival project that would stretch from Turkmenistan to India through Afghanistan and Pakistan. Security concerns in Afghanistan, however, challenge that project's development.
U.S. State Department officials have said they recognized that Pakistani was dealing with an energy crisis and would work with Islamabad to find alternatives to the Iranian project.