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Iran may cancel pipeline project with Pakistan

30 January 2017 [17:38] - TODAY.AZ

By Azernews


By Kamila Aliyeva

Iran has said it may cancel its high-profile, $7-billion ‘Peace Pipeline’ project with Pakistan over lengthy construction delays, with would deprive energy-starved Pakistan of the some 22 million cubic meters of gas a day it would have received from its neighbor.

Iran’s National Gas Company Head Hamid Reza Araqi said that if negotiations fail to come up with a way to feasibly realize the project, it could be cancelled entirely, Mehr reported.

The gas project has faced repeated delays since it was conceived in the 1990s to connect Iran's giant South Pars gas field to India via Pakistan. Pakistan and Iran finally signed the initial agreement in 2009, while India withdrew from the deal beginning as the Iran-Pakistan-India gas pipeline project

Under the deal, Iran was to provide 22 million cubic meters per day of gas. Pakistan was slated to begin importing Iranian gas imports in early 2015, but the country has not yet begun construction of the related pipeline, nor has Iran completed its project to transit South Pars gas to the Pakistani border. Iran was planning to build a 180-kilometer pipeline.

The pipeline was intended to connect Iran's giant South Fars gas field with Pakistan's southern Baluchistan and Sindh provinces.

Tehran previously offered Pakistan a loan worth $500 million—a third of the cost of Pakistan’s portion of the pipeline—to start pipeline construction in Pakistan’s territory. This offer was later revoked due to financial problems caused by sanctions.

Earlier, Pakistan's Minister of Petrolium Shahid Khaqan Abbasi said that for the implementation of the pipeline, all sanctions against Iran should be lifted.

Some U.S. unilateral sanctions against Iran, including a ban on transactions with Iran using USD, which creates obstacles for foreign investors to do business with the Islamic state, are still remaining in place.

Also, Pakistan urges Iran to reduce the price of gas. Pakistan claims that the alleged price of gas from Turkmenistan, which will go on the TAPI pipeline in the future, is less than the price of Iranian gas to be delivered through the Peace Pipeline

By holding 157.8 billion barrels of recoverable crude oil reserves, Iran possesses the world's fourth largest reserves of crude oil. The Islamic Republic also holds 34 trillion cubic meters of proven gas reserves, sharing 18.2 percent of total global gas reserves, which puts the country in the top of the world's gas holders list.

URL: http://www.today.az/news/regions/158160.html

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