“The $7-billion Iran-Pakistan gas pipeline contract will be finalised this week, and based on the approved time framework the export of gas to Pakistan will be launched by the end of 2015,” said Hojjatollah Qanimifard, deputy director in charge of investment at the National Iranian Oil Company.
“In a meeting in Tehran on Tuesday (June 8), the final approval on pipeline by the NIOC board of directors will be delivered to Pakistani officials and their letter of guarantee will be received,” he said in the comments on semi-official news agency ILNA.
The project is crucial for Pakistan to avert a growing energy crisis already causing severe electricity shortages in the country of about 170 million, at the same time as it confronts Islamist militancy.
The pipeline will connect Iran’s giant South Fars gas field with Pakistan’s southern Baluchistan and Sindh provinces.
Iran has the world’s second-largest gas reserves after Russia. But sanctions by the West, political turmoil and construction delays have slowed its development as an exporter.
Dubbed the “peace pipeline,” the project has been planned since the 1990s and originally would have extended from Pakistan to its old rival, India.
However, India has been reluctant to join the project given its long-running distrust of Pakistan, with which it has fought three wars since they achieved independence in 1947.
Under a deal signed in March, Pakistan will be allowed to charge a transit fee if the proposed pipeline is eventually extended to India.
The United States has tried to discourage India and Pakistan from any deal with Iran because of Tehrans’ uranium enrichment activities and suspicions it wants to build nuclear weapons.
Iran, whose economy has been hit by U.N. sanctions over the dispute, denies any such ambitions.
Iranian media reported on Sunday that the oil minister had ordered an end to talks with Anglo-Dutch Shell and Spain’s Repsol over the development of South Pars after the majors failed to meet ultimatums on their involvement.
Iran has the world’s second largest gas reserves but has struggled for years to develop its oil and gas reserves.
Iran says it already makes $18 billion annually from production at 10 phases of South Pars but that income could leap to at least $96 billion a year when all phases are completed. China’s National Petroleum Corporation is developing part of it.
The Islamic republic says it needs around $25 billion a year in oil and gas industry investment.
Hossein Noghrekar Shirazi, deputy oil minister in charge of international affairs, told Abrar daily on Sunday Iran’s gas production capacity of 600 million cubic metres per day could rise to 1.1 billion cubic metres by 2015.
(Reporting by Hashem Kalantari; Writing by Andrew Hammond; Editing by Sugita Katyal)
