Islamabad, Beijing Could Sign Iran-Pakistan Gas Pipeline Construction Deal This Month

Islamabad and Beijing could soon sign the deal to construct the Iran-Pakistan gas pipeline, reported Wall Street Journal last week.

The agreement could be finalised during the visit of Chinese President Xi Jinping to Pakistan scheduled to begin on April 19, the news report stated.

The pipeline project has been much delayed due to lack of finance as a result of US sanctions on Iran.

Pakistan is negotiating with China Petroleum Pipeline Bureau (CPP), a subsidiary of Chinese energy giant China National Petroleum Corporation, to build 435 miles (700 kilometers) of pipeline from the western Pakistani port of Gwadar to Nawabshah in the southern province of Sindh, where it will connect to Pakistan’s existing gas-distribution pipeline network, Wall Street Journal said adding that the remaining 50 miles (80 kilometers), from Gwadar to the Iranian border, will be built by Pakistan.

CPP would bring the required capital of $1.5 billion and will also construct the LNG terminal in Gwadar, costing $800 million. The terminal, which is likely to be offshore, will have a capacity of 500 mmcfd of LNG.

Iran has already built its share of the pipeline on its own soil and is waiting for the Pakistani side of the pipeline to be built. On June 5, 2009 Inter State Gas System of Pakistan and National Iranian Oil Company signed an agreement, which envisaged the first flow of gas to Pakistan to commence by December 31, 2014.