Nuclear deal revives hope for Pakistan-Iran gas pipeline


Islamabad is hopeful of reviving a stalled gas pipeline project connecting Iran to energy-starved Pakistan, Minister of Petroleum and Natural Resources Shahid Khaqan Abbasi said on Wednesday following the signing of a historic nuclear deal between Tehran and world powers.

Launched in 2010, the project envisages the creation of 1,800 kilometre pipeline from Iran to Pakistan, which has for years been blighted by an energy crisis that has stunted its economic growth.

“A lot of issues that have built up over the years will be resolved, especially the Iran-Pakistan pipeline, where we have a contractual obligation to buy the gas and they have the obligation to deliver the gas but that has been hit by the sanctions,” Shahid Khaqan Abbasi said.

Iran completed its part of the project in 2013, but Pakistan put construction on hold citing US and European sanctions on Tehran linked to its nuclear programme.

The International Atomic Energy Agency is set to verify Iran has implemented its commitments in December, paving the way for sanctions to be lifted from the start of next year.

“Now hopefully, as the sanctions are removed, it will facilitate us in addressing our energy needs and also meet the contractual obligation,” Abbasi added.

Pakistan’s key ally China is currently financing the construction of a gas pipeline from the southern town of Nawabshah to the deep-water port of Gwadar, not far from Iran.

Once that is built, Pakistan will “only have to build another 80 kilometres” of pipeline to link up to Iran, and could eventually extend the project as far as its northern border with China, said Abbasi.

He further said that projects worth Rs 1,000 billion are underway for completion of Iran-Pakistan gas pipeline and LNG smart gas projects. He said a decision has been taken to postpone the recovery of cess for three months after which further action would be decided by the concerned committee of the parliament.