The Ministry of Foreign Affairs (MoFA) has advised the Petroleum Division to expedite the Iran-Pakistan (IP) gas pipeline project without delay, citing its significance as a crucial energy initiative, according to informed sources reported by Business Recorder.
MoFA’s recommendation predates recent comments by US Assistant Secretary of State for South and Central Asia Donald Lu opposing the IP project.
During an inter-ministerial meeting at MoFA, the Petroleum Division representative highlighted that both the Federal Cabinet and the Cabinet Committee on Energy (CCoE) have endorsed the Ministerial Oversight Committee’s (MOC) recommendations, formed on the Prime Minister’s directive.
Cost estimates for pipeline construction indicate that $158 million (equivalent to Rs45 billion) from Gas Infrastructure Development Cess (GIDC) funds will be utilized, with an additional Rs2.5 billion expected in FY 2023-24. The remaining Rs42.5 billion may be allocated in FY 2024-25, subject to GIDC Board approval.
The government plans to utilize Rs45 billion from GIDC funds for pipeline construction to avoid potential contractual liabilities amounting to $18 billion due to delays.
The MOC has recommended initiating construction from Gabd Remdan to Gwadar (80 Km) using GIDC funds. Waiver application filing with US authorities is postponed due to geopolitical conditions.
Additionally, the MOC proposed resolving outstanding issues with Iran through High-Level and Pakistan Coordination Committees while engaging with other countries for gas swap arrangements.
The Petroleum Division representative stated that project activities have commenced, including route validation and engineering design, scheduled for completion by September 2024. Land acquisition and tender awards for engineering procurement and construction are planned subsequently.
The project aims for completion by September 2025, with an ongoing pipeline construction of 250+ Km on the Iranian side. The gas supply contract spans 25 years.
The Chair/Secretary of Foreign Affairs emphasized the project’s importance, urging the Petroleum Division to proceed with pipeline construction promptly.
US Ambassador Donald Blome recently discussed the IP pipeline with Petroleum Minister Musadik Malik, highlighting US concerns about potential sanctions.
Story by Mushtaq Ghumman
