Sanctions on Iran still hampering IP gas pipeline project

ISLAMABAD: A few international sanctions on Iran, including 'dollar transaction' are causing delay in execution of the much awaited Iran-Pakistan (IP) gas pipeline project, official sources in the Ministry of Petroleum and Natural Resources said on Friday.

"As soon as the sanctions are completely lifted, practical work will be started on the project," they told APP. Answering a question, the sources informed that Pakistan had conveyed to Iran that international financial institutions were not ready to finance this project due the dollar transaction ban.

They said there was also a 'snapback' clause, under which sanctions could be revived against Iran in case it violates its nuclear deal with the west.

"The transaction of dollars has not been allowed and investors are not willing to finance due to `snapback' clause which may lead to sanctions again," they said. The sources said Pakistan was ready to complete the part of the gas pipeline on its side within 30 months once the sanctions on Iran were lifted.

They said the government had allocated Rs25 billion in the current fiscal year for the development of gas infrastructure across the country, including the IP project.

Sharing details of the project, they said Inter-Governmental Framework Declaration was signed between the two countries on May 24, 2009, while GSPA had reached on June 2009. Subsequently, Pakistan issued sovereign guarantee on May 28, 2010.

Project consultant was appointed on April 11, 2011, while the design, feasibility, route survey and other formalities of the project were completed on September 8, 2012.

The 56-inch diameter pipeline will initiate from South Parsgas field Iran and end at Nawabshah covering a distance of around 1,931 kilometer with 1,150km portion in Iran and 781km in Pakistan.

The implementation is to be done on the basis of a segmented approach whereby each country will be responsible for construction of pipeline in the respective territory.

Around 750mmcfd gas flow in the pipeline is projected to help generate around 4,000MW electricity, along with creating job opportunities in backward areas of Balochistan and Sindh.