Iran tells Pakistan to fund its own side of cross-border pipeline

05 November 2013

Tehran says it made no commitment to finance whole pipeline as Iran side nears completion

Iran’s deputy oil minister has urged Pakistan to finance its own side of a gas pipeline connecting the two countries as Tehran closes in on completing the Iranian side of the project.

In October, Pakistan’s Petroleum and Natural Resources Minister Shahid Khaqan Abbasi asked Iran for $2bn to complete the construction of its 780-kilometre section of the pipeline.

“We did not make such a commitment to help Pakistan with $2bn for the construction of the pipeline,” Ali Majedi, Iran’s deputy oil minister, told Iran’s Fars News Agency. “Pakistanis need Iran’s gas and they should accelerate their work.”

The complete pipeline will run from Iran’s Assaluyeh Energy Zone via Baluchistan in Pakistan to Sindh, transporting gas from Iran’s South Pars offshore field.

Both countries have said that sanctions imposed on Iran will not prevent the completion of the pipeline, following suggestions that the US government had offered Pakistan cheaper gas if it stopped the development.

However, the project has run into funding difficulties, with Commercial Bank of China withdrawing its loan to Pakistan for the project.

Iran has already completed the pipeline running through its country and is eager for Pakistan to finish its pipeline, as once completed, it will transport 21.5 billion cubic metres a year of South Pars gas, which can later be raised to 55 billion cubic metres.

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