Pakistani Officials To Finalize $500 Loan Deal With Iran For IP Project

Islamabad, Dec 1, IRNA – A team of Pakistani officials will leave for Iran on Friday to make headway on a $500 million financing deal, extended by the Iranian government for the Iran-Pakistan (IP) gas pipeline project, a media report said on Friday. Daily ‘Express Tribune’, quoting sources, said that after finalizing the total arrangement, the petroleum ministry will seek approval from the cabinet in order to move ahead on the financing plan for the IP gas pipeline project. According to sources, Adviser to Prime Minister on Petroleum and Natural Resources, Asim Hussain, will lead the Pakistan team. Mubeen Sulat, Managing Director of Inter-State Gas Systems, will also be part of the delegation. During Iranian President, Mahmoud Ahmadinejad’s visit to Pakistan for the Developing-8 Summit, an Iranian team had also visited the country to finalize the draft of the Inter-Governmental Cooperation Agreement on Engineering Procurement Construction (EPC) works. The Pakistani side was informed during the visit that $250 million in financing for the IP project, on a government-to-government basis, was confirmed; whereas the Iranian government is moving to settle some issues with Iranian commercial banks to provide another $250 million. “During the upcoming visit of the Pakistani team, the arrangement of the total $500 million will be finalized,” sources added. Pakistan will avail this financing to lay its portion of the gas pipeline. Iranian companies will carry out the construction in a joint venture with Pakistan’s gas utilities: Sui Northern Gas Pipelines and the Sui Southern Gas Company. Under the IP gas import project, Pakistan will import 750 million cubic feet of gas per day (mmcfd). That quantity is extendable to one billion cubic feet of gas per day. The Government of Balochistan wants 250mmcfd for use at the Gwadar Port, and the Pakistani government is expected to avail the import facility up to the maximum allowed to meet Balochistan’s requirements. German-based firm ILF has already completed a detailed engineering design of the project. According to the interim feasibility report, the cost of the project will be in the range of $1.2-1.5 billion./end