ISLAMABAD: Pakistan has asked Iran for $2 billion in financing to build its side of a controversial Iran-Pakistan (IP) gas pipeline that has drawn threats of US sanctions, Islamabad's petroleum minister said Tuesday.

The Iranian side of the $7.5-billion project is almost complete, but Pakistan has run into repeated problems paying for the 780 kilometre (485 mile) section to be built on its side of the border.

Pakistani petroleum minister Shahid Khaqan Abbasi told AFP on Tuesday that the preparatory work was complete, but they had asked Iran to provide $2 billion for the construction work.

“All these issues will be discussed in a meeting which we have requested, but so far there is no reply from the Iranian side,” Abbasi said.

“They were busy in cabinet formation and I hope that this meeting will take place within this month.”

It is the latest setback to hit the long-delayed section of the pipeline that would link the two neighbours and help ease Pakistan's chronic gas shortages.

US officials have warned that the project would risk triggering sanctions aimed at Iran.

But Abbasi denied coming under pressure from Washington since Prime Minister Nawaz Sharif came to power in the May general election. “Americans have not so far talked about this pipeline with us at any level,” he said.

Asked if Pakistan was hoping to complete the project before the December 2014 deadline, Abbasi replied: “Anything is possible, if we have the resources.” “It depends on the financing and availability of the machinery,” he added.

Iran has the second largest gas reserves in the world but has been strangled by a Western embargo that has seen its crude exports halved in the past year.

It currently produces around 600 million cubic metres of gas per day, almost all of which is consumed domestically due to lack of exports. Its only foreign client is Turkey, which buys about 30 million cubic metres of gas per day.

The Karachi stock exchange took fright when the countries' then-presidents Mahmoud Ahmadinejad and Asif Ali Zardari inaugurated the much-delayed section of pipeline in March.

Spooked by fears of US sanctions, the main index slumped almost 2.5 per cent.

Abbasi said the government had sought bids from Pakistani and Iranian companies for pricing of the construction cost of the pipeline.

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Comments are closed.

Comments (9)

October 8, 2013 7:46 pm

Do n't blame US alone. Saudi Royals, benefactors of Nawaz Sharif too don't want this project to go ahead.

October 8, 2013 9:02 pm

Pakistan lost a great opportunity to push Iran under Ahmedinejad. Now under Rouhani Iran is developing new friends and new markets. It will be difficult for Pakistan to get its way now.

Strike iron when it is hot.

Sultan Alvi
October 9, 2013 3:54 am

Pakistan should ask PLA ( Pakistanis living abroad) for help in financing this IP pipe line project.

Insane Engineer
October 9, 2013 6:03 am

Now you are talking. I am for this pipeline, all the way to the prosperous future.

October 9, 2013 4:09 pm

Iranians must be thinking, "Wow, Pakis are smart!"

Insane Engineer
October 9, 2013 4:23 pm

@Expat(usa): For that we blame you.

October 9, 2013 10:37 pm

Let the Iranians pay for the Pakistani side of the pipeline. The next step would be then to ask them to pay for the gas consumed as well.

Syed Husain
October 10, 2013 4:27 am

It is interesting to note that Pakistan has asked Iran for $2 billion in financing to build its side of a controversial Iran-Pakistan (IP) gas pipeline. Pakistan does not have the money for the construction of this pipeline. Is Pakistan capable of paying Iran for the natural that Pakistan will be consume? Or are we planning to take Iran for a ride?

Syed Haider
October 10, 2013 7:11 am

These past few governments are truly shameful. An international embarrassment. Loot from their own people, mess up a budget and then ask a non super power to fund THEIR half of the project. Subhanallah.

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