Tehran, Dec 2, IRNA – Pakistan has less than one month time to complete the pipeline for export of gas from Iran otherwise, based on the contract, Tehran is authorized to demand compensation for the delay through international arbitration.
  According to a deal signed between Iran and Pakistan in 1387 (2008-2009) Iran’s gas was planned to be exported to Pakistan by December 2014.
Construction of part of the pipeline in Iran has almost been completed but Islamabad has failed to make the pipeline ready. Islamabad just broke the ground for the pipeline on March 12, 2012.

Recently, Pakistani officials have announced that they need $2 billion Iranian investment for the completion of the 780-km pipeline while officials of the Iranian Oil Ministry have said in reply that Iran has made no commitment with regard to financing construction of the pipeline in Pakistan and that the country should meet its financial demands itself.

Pakistan for some time was after attracting Chinese investors for participation in the construction of the pipeline but reached no desirable result because in case of Chinese investment in the pipeline they would face pressure from the US administration.

It is said that on the basis of the contract, for each day of delay Pakistan should pay Iran $8 million.

Certainly Pakistan cannot complete construction of the pipeline by the deadline which is the end of this month therefore Tehran should make a decision either to extend it or take the case to court for receiving compensation.

The idea of construction of the so-called ‘peace pipeline’ came up in 1990 and it was expected that Iran’s gas pipeline which was supposed to transfer gas to Pakistan and India be a harbinger of peace and fraternity in the Indian Subcontinent. Given that Pakistan and India agreed to put aside their differences for maintaining security of the pipeline, it was named ‘peace pipeline’.

According to the initial agreement the 2700-km pipeline was to transfer Iran’s gas from Pakistan to India. In case of final agreement 1100 km of the pipeline would be constructed in Iran, 1000 km in Pakistan and 600 km in India.

According to the agreement Iran undertakes to sell its gas at an agreed price to India and Pakistan. Meanwhile, proposals had been received from Turkmenistan and Qatar for joining the agreement but in practice none of the ideas was realized.

Currently gas reserves in Pakistan are diminishing and according to estimates the imported gas through the ‘peace pipeline’ is four times less expensive than other import options. After completion of the project the pipeline is expected to bring between 300 to 500 million dollars to Pakistan annually.

By IRNA

 

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