Pakistan Begins Work on Pakistan-Iran Gas Pipeline Ahead of Iranian President's Visit

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Pakistan Begins Work on Pakistan-Iran Gas Pipeline Ahead of Iranian President's Visit

Flag of Pakistan (© Shutterstock/A Kisel)
Flag of Pakistan (© Shutterstock/A Kisel)

Pakistan has begun work on the long-delayed Iran-Pakistan gas pipeline ahead of Iran’s president Ibrahim Raisi’s visit in April.

Pakistani authorities have begun initial work on an 80-kilometer section of the Pakistan-Iran gas pipeline in anticipation of Iranian President Ebrahim Raisi's visit on April 22 as Iran’s deadline for the project’s completion nears. 

A senior Energy Ministry official told the publication the Inter-State Gas Company (ISGS) has issued tenders to consultants for the re-validation of a survey and Front-End Engineering Design (FEED) for the project despite longstanding U.S. opposition to the project and threats of sanctions. 

The pipeline, originally slated for completion in December 2014, has faced nearly a decade of delays with Pakistan citing U.S. sanctions as a reason for the delay, a position Iran has rejected. 

In January, Tehran reportedly issued a final notice to Islamabad demanding completion of its portion of the pipeline by February-March 2024 or face an $18 billion penalty under the Gas Sales Purchase Agreement.

According to the official, constructing the 80-kilometer section is crucial to avoid arbitration in France and the potential penalty. 

The section would require two compressor stations, one at the border and one in Gwadar, and would initially transport 100 million cubic feet per day (mmcfd) of gas, with capacity expected to reach 750 mmcfd over the project's 25-year lifespan.

Following the re-validation process, authorities will begin land acquisition and awarding an Engineering, Procurement and Construction (EPC) contract, with the project is expected to be completed in 24 months at a cost of Rs44 billion ($528.3 million). 

The official noted that the Petroleum Division will seek significant funding for the project in the 2024-25 Public Sector Development Programme (PSDP) as the Finance Ministry may not be able to allocate the necessary funds from the Gas Infrastructure Development Cess (GIDC).

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