China on tap for Iranian 'Peace Pipeline,' report says

Asian development bank, Washington back rival project from Turkmenistan.

By Daniel J. Graeber

ISLAMABAD, April 9 (UPI) -- Pakistani officials said they're building a natural gas pipeline that could stretch to Iran with anticipation of financial support from the Chinese government.

Chinese President Xi Jinping is scheduled in Islamabad in late April. A report published Wednesday by the Wall Street Journal says the Chinese leader will offer support to a project first discussed in the 1990s as the so-called Peace Pipeline.


"We're building it," Pakistani Petroleum Minister Shahid Khaqan Abbasi told the newspaper. "The process has started."

The Journal reports as much as 85 percent of the $1.5 billion project could be financed through Chinese loans. Iranian energy officials, meanwhile, are in Beijing discussing bilateral energy ties.

For Pakistan, an Iranian gas pipeline, would help address energy needs in a sector where sagging infrastructure leaves the country without a reliable source of power.

The Asian Development Bank in February said it was supporting efforts to help Pakistan build its first liquefied natural gas terminal with a $30 million loan. With the LNG facility, the bank said the Pakistan government would save about $1 billion per year on its fuel import bills.


The ADB in the past has lent its support to a multilateral natural gas pipeline that would stretch from Turkmenistan, an option favored by the U.S. government over the Iranian project.

Pakistani media reports last year, meanwhile, cited energy officials in Islamabad as saying U.S. sanctions on Iran clouded the prospects of an Iranian gas pipeline.

A State Department official was quoted by the Journal as saying the U.S. government wouldn't speculate on how any sanctions relief that comes as a result of a framework nuclear agreement with Iran could influence "any particular proposed business ventures."

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