Pakistan-Iran gas pipeline project has been delayed for more than three years now and the government of Iran is now pushing its Islamabad counterparts to kickstart the project. Tehran has written a letter to Pakistan to initiate a dialogue over the project commencement and to go over all the hurdles that have been contributing in the project delay.
The project was announced in September 2012 and was expected to be completed by December 2014. However, sanctions imposed on Iran by the United States over its alleged nuclear program along with the pressure from Saudi Arabia in the same regard became the major reason for this project delay. But now Iran is making renewed efforts in order to start the 2,700-kilometer project without any further delays.
About 2,000 km of the pipeline will run through Iran while the rest will remain in Pakistan. Apart from the pressures and sanctions mentioned earlier, Pakistani government also feared that it won’t be able to secure funds from International Institutions for the project. However, Iran has rejected such claims saying that there will be no issues related to project funding.
Pakistan had earlier been persuading Iran to cut down the cost of gas that it will be receiving from the project as Qatar was providing Liquefied Natural Gas (LNG) at a lower rate than Iran. Pakistan has an agreement with Iran that the latter will have to cut down its prices, if it is able to get energy resources at a cheaper rate from any other country.
While Iran is looking to start the gas pipeline project with Pakistan, it is also said that the latter itself is looking to revive Gwadar pipeline project that would serve as an alternate resource to Iran-Pakistan gas pipeline.
The project was discarded as Saudi Arabia increased pressure on Pakistan for improving ties with Iran as the Gwadar pipeline would be stretched till the borders of Iran, if all the restrictions on Tehran were to be lifted.
At that time, it was said that the growing cost of $2.3 billion was the major reason for discarding the project, despite the fact that the federal government was all set to earn $600 million as taxes and duties from the pipeline. Prime Minister Shahid Khaqan Abbasi said that the project will be reviewed now due to its strategic significance.