China will build a pipeline to bring natural gas from Iran to Pakistan to help address Pakistan’s acute energy shortage under a deal to be signed during the Chinese president’s visit to Islamabad this month, Wall Street Journal quoting Pakistani officials said Thursday.
The arrival of President Xi Jinping is expected to showcase China’s commitment to infrastructure development in ally Pakistan at a time when few other countries are willing to make major investments in the cash-strapped and terrorism-plagued country.
The pipeline would amount to an early benefit for both Pakistan and Iran from the framework agreement reached earlier this month between Tehran and the US and other world powers to prevent Iran from developing nuclear weapons. The US had previously threatened Pakistan with sanctions if it went ahead with the project.
“We’re building it,” Pakistani Petroleum Minister Shahid Khaqan Abbasi told The Wall Street Journal. “The process has started.”
In Washington, US officials said details of sanctions will be negotiated as part of a comprehensive nuclear deal with Iran due in June. Dubbed the “Peace Pipeline,” the project will further bolster improving ties between Pakistan and Iran, uneasy neighbours for decades as a result of Pakistan’s ties to Iran’s long-term adversaries, Saudi Arabia and the US.
The pipeline will bring much-needed gas to Pakistan, which suffers from a crippling electricity deficit because of a shortage of fuel for its power-generation plants. Pakistan has been negotiating for months behind the scenes for China to build the Pakistani portion of the pipeline, which will cost up to $2 billion.
Tehran says that its 560-mile (900-kilometer) part of the pipeline from an Iranian gas field is complete and has long pressed Pakistan to build its part of the scheme.
The prospect of an Iran nuclear agreement, which would ease sanctions in stages once the deal is completed, has given Islamabad further impetus to clear the project. Among the first sanctions to be lifted, according to the framework accord, would be the ban on Iran energy exports.
“This Iran nuclear agreement will help us in getting a few things which were coming into the way of the Iran-Pakistan gas pipeline to be cleared and we will move forward,” Pakistan’s ambassador to Iran, Noor Muhammad Jadmani, said Sunday in Tehran, according a report on IRNA, the official Iranian news agency.
Pakistan is negotiating with China Petroleum Pipeline Bureau, a subsidiary of Chinese energy giant China National Petroleum Corporation, to build 435 miles (700 kilometers) of pipeline from the western Pakistani port of Gwadar to Nawabshah in the southern province of Sindh, where it will connect to Pakistan’s existing gas-distribution pipeline network. The remaining 50 miles (80 kilometers), from Gwadar to the Iranian border, will be built by Pakistan. The pipeline, which would take two years to build, would eventually supply Pakistan with enough gas to fuel 4,500 megawatts of electricity generation – almost as much as the country’s entire current electricity shortfall.