Iran-Pakistan Gas Pipeline Completion Date Extended: Report

During the recent visit of Prime Minister Nawaz Sharif to Iran, the two countries held in-depth discussions on the completion of IP gas pipeline and agreed to extend the completion date by one year, the Pakistani officials stated.

On May 24, 2009 Iran and Pakistan signed a bilateral treaty titled Intergovernmental Framework Declaration while on June 5, 2009 Inter State Gas System of Pakistan (ISGS) and National Iranian Oil Company signed the Gas Sale Purchase Agreement (GSPA), which envisaged the first flow of gas to Pakistan to commence by December 31, 2014, the Business Recorder reported on Tuesday.

"During Nawaz Sharif's recent visit to Iran the impression that Pakistan might abandon the $1.5 billion project due to pressure from the US, Saudi Arabia and some other oil-rich states was dispelled,” the Pakistani officials stated.

“We are really serious about constructing the pipeline as we desperately need gas to meet our local requirements. Besides IP gas, we are also progressing on Turkmenistan-Afghanistan-Pakistan and India (TAPI) gas pipeline project, which will bring 1.325 Billion Cubic Feet Gas per Day to Pakistan and India and 500 Million Cubic feet per Day to Afghanistan.”

The sources emphasized that the two leaders had accepted the fact that the gas pipeline would not come on stream by December 2014 following the imposition of sanctions on Iran by the world powers, the report said.

The IP pipeline is designed to help Pakistan overcome its growing energy needs at a time when the country of over 180 million people is grappling with serious energy shortages.

The IP pipeline is designed to help Pakistan overcome its growing energy needs at a time when the country of over 180 million people is grappling with serious energy shortages.

The final construction phase of the IP pipeline was inaugurated on March 11, 2013. Iran has already built 900 kilometers of the pipeline on its soil.

Pakistan, however, has fallen short of constructing the 700-kilometer part of the pipeline on its territory.

The two countries are responsible for completion of the pipeline within their territories. Failure on the part of one party entails penalties equivalent to the price of daily gas quantities that is around $3 million for every day's delay in completion of the project. Iran could also have claimed billions of dollars in compensation for any breach of contract, the report said.

Iran laid the pipeline on its side by investing $2 billion but Pakistan failed to lay the pipeline on its side of the border, the report added.