Cabinet okays construction of 80km segment of Iran-Pakistan gas pipeline
- By Web Desk -
- Feb 26, 2024
ISLAMABAD: In a fresh push towards completion of a multibillion-dollar gas supply project, the outgoing federal cabinet gave the nod to complete the first phase of the 80-kilometre Iran-Pakistan (IP) gas pipeline project within the country’s territory, ARY News reported on Monday, citing sources.
Sources told ARY News that the federal cabinet, through circulation of summary, gave its approved to start building an 80-kilometre segment of the Iran-Pakistan gas pipeline at an estimated cost of $158 million (Rs44.2 billion).
According to sources, the pipeline would be laid from the Iranian border to Gwadar and take a year to complete. Government sources claimed that the funds for the project would be provided from the Gas Infrastructure Development Cess (GIDC).
The development came after Cabinet Committee on Energy (CCoE) approved construction of the 80-kilometre Iran-Pakistan (IP) gas pipeline project within the country’s territory.
“The CCoE approved the recommendations of the Ministerial Oversight Committee for the IP Project (Iran-Pakistan gas pipeline project) constituted by the prime minister in September 2023 whereby the committee recommended to start work on the 80km segment of the pipeline inside Pakistan, i.e. from Pakistan border up till Gwadar in the first phase,” said an official statement issued by the Ministry of Energy, rather than the Ministry of Finance.
Former prime minister Shehbaz Sharif had constituted a committee in January 2023 to recommend a way forward, keeping in view its economic viability and financing.
The caretaker government replaced it with a Ministerial Oversight Committee (MOC) in September, which endorsed the decision of the previous committee and got the waiver application prepared by foreign legal counsel.
The Ministerial Oversight Committee also obtained opinion from the foreign legal firm, Willkie Farr & Gallagher LLP.
It is pertinent to mention here that Iran gave Pakistan time until September 2024 to complete the project, otherwise, it may move to international arbitration for the breach of contract.
Senator Muhammad Abdul Qadir, the Chairman of the Senate’s Standing Committee on Petroleum said that both sides will start formal contacts for the gas pipeline project within two to three weeks.
The Pakistan-Iran gas pipeline project has faced many delays due to the risk of US sanctions on Iran.
The project remains substantially delayed. While the Iranian section of the pipeline has been completed, the Pakistani section remains under construction and subject to delays owing to concerns about the US sanctions on Iran.