ISLAMABAD: In a surprising move, Minister for Petroleum and Natural Resources Dr Asim Hussain confirmed on Thursday that the consortium led by the Industrial and Commercial Bank of China had expressed its inability to arrange funds for the Iran-Pakistan gas pipeline project.

However, he said sufficient funds generated through gas surcharge were available to complete the project from indigenous resources by the end of 2014.

Oddly enough when this was reported by newspapers, including Dawn, on Wednesday, his ministry immediately tried to deny it by issuing a vaguely worded clarification.

However, the very next day the minister conceded in parliament that the consortium had backed out of the project.

Mr Hussain informed the National Assembly during question hour that tender had already been floated for laying pipeline for the project, clearly indicating that the project was on track despite tough warnings by the United States.

He said installation of Liquefied Natural Gas (LNG) terminals would be started after the approval of Economic Coordination Committee (ECC).

Disclosing that the circular debt of petroleum sector had soared up to around Rs397 billion, the minister said the Planning Division was moving a summary for rationalisation of power tariff and withdrawal of subsidies.

He said non-receipt of payment from the power sector against supply of oil and gas was the main cause of the mounting circular debt which was Rs70.58 billion in March 2008. He said the government had constituted a high-level committee to resolve the issue.