‘Pakistan would have to pay billions of rupees to Iran if scraps IP gas pipeline project’

TEHRAN – Pakistan would have to pay billions of rupees to Iran if it did not fulfill its obligations regarding the Iran-Pakistan gas pipeline project, Former Pakistani federal minister Syed Naveed Qamar said. He cautioned the Pakistani government about the consequences of scrapping the project and said the government must complete the project before December 2014 or face penalties, according to the Express Tribune. Addressing the National Assembly, Qamar asked “Will the U.S. pay our fines?” and then answered his own question: “nothing like this will happen.” The project is vital for Pakistan as it is the only solution to the energy crisis, Qamar said while advising the government to pursue the project. Meanwhile, the Iranian Oil Ministry has warned the Energy Ministry of Pakistan over delay in the construction of the Pakistan section of the Iran-Pakistan gas pipeline, saying that Iran may fine Pakistan in this regard. The Iranian Oil Ministry has said that the construction of the pipeline should be completed by March 2014. According to sources, Iranian Deputy Minister of Petroleum in International and Commercial Affairs Ahmad Khaledi, in a letter on May 27, reminded Pakistan government that after a government-to-government cooperation agreement between the two countries, they were supposed to select entities to commence work on the gas pipeline immediately. “Iran has already done this, but it is still waiting for any action from Pakistan side. Since time is too short, your prompt instruction in this regard is highly appreciated,” the Iranian minister said. On February 20, the construction of the Pakistan section of the Iran-Pakistan (IP) gas pipeline started in the presence of oil ministers of the two countries. Iranian President Mahmoud Ahmadinejad in his trip to Pakistan on November 22 emphasized the need to complete the Iran-Pakistan gas pipeline according to schedule. The Iran-Pakistan gas pipeline, projected to cost $1.2-1.5 billion, is aimed to export a daily amount of 21.5 million cubic meters of Iranian natural gas to Pakistan. Iran has already constructed more than 900 kilometers of the pipeline on its soil. Iran has proposed a $250-million-dollar loan to Pakistan to help finance the project. Iran has pledged to secure the required $500 million to complete the Pakistani section of the project and the rest will be provided by the Pakistan government. It has been planned that Iranian and Pakistani companies to form a joint venture to finance the project. According to the project proposal, the pipeline will begin from Iran's Assalouyeh Energy Zone in the south and stretch over 1,100 km through Iran. In Pakistan, it will pass through Baluchistan and Sindh.