Iran asks Pakistan to build infrastructure for gas pipeline

Iran has asked Pakistan to building infrastructure on its side for Iran-Pakistan gas pipeline project.

Pakistan PM Nawaz Sharif interacting with Iran’s supreme leader Ayatollah Syed Ali Khamenei.

Pakistan PM Nawaz Sharif interacting with Iran’s supreme leader Ayatollah Syed Ali Khamenei.

Iran has asked Pakistan to building infrastructure on its side for Iran-Pakistan gas pipeline project.

Islamabad, May 13/Nationalturk – Iran has asked Pakistan to building infrastructure on  its side for Iran-Pakistan gas pipeline to start flow of gas to Pakistan.

Pakistan Prime Minister Nawaz Sharif during his two-day visit to visit to Iran met Iranian president Hassan Rowhani, Supreme leader of Iran’s Islamic Revolution Ayatollah Sayyed Ali Khamanei and other top Iranian officials.

Sources said during the meetings, leadership of Pakistan and Iran pledged to increase cooperation in all fields between the two countries. The Iran-Pakistan gas pipeline project was also discussed during meeting between Nawaz Sharif and Iranian president and Iran’s spiritual leader.

They said Iranian side has asked Pakistan to start constructing the infrastructure on its side for laying of the pipeline. Iran has already completed laying of pipeline on its side.

Pakistan bound to pay $200 million a month penalty to Iran

Pakistan is bound to pay $200 million a month for not meeting the gas pipeline deadline of December 31, 2014. Under the Gas Sales Purchase Agreement (GSPA) signed between Iran and Pakistan, there is a clause of take and pay under which Pakistan will have to pay fine of $200 million if it fails to develop infrastructure and lay out the pipeline in its territory from the point of 250 MP at the Pak-Iran border to Nawabshah.

Pakistan has been telling Iranian officials that it could not arrange the funding from the international financial institutions because of US and EU sanctions on Iran for its nuclear ambitions.

“Iranian leadership have accepted this notion and assured Pakistan that no penalty will be imposed if the country shows seriousness in completing laying of pipeline on its side. During PM’s visit to Iran, the two countries have agreed to continue the project with a new impetus,” sources said.

They said since US and EU countries seem inclined to relax economic sanctions on Iran, there is now visible activities in Pakistan and Pakistani officials are feeling much relaxed now and may initiate the process for building the infrastructure as early as possible.

‘It will take 16 months to lay pipes in Pakistan’

According to Pakistani officials, it will take them 15-16 months to complete laying of infrastructure on its side once the work starts.

Under the GSPA, the price of gas to be imported from Iran will be at 78 percent of the crude oil as it is linked with Japan cocktail price. Pakistan is facing a shortage of 2.5 billion cubic feet gas per day and in case Iran-Pakistan gas project gets materialised, then the imported gas will help energy starved Pakistan to come out of energy crisis.

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