Wednesday, November 11, 2015

Iran calls off Pakistan’s fine over pipeline construction delay


The managing director of National Iranian Gas Export Company (NIGEC) said on Tuesday that Iran had no plans to fine Pakistan for delay in gas pipeline construction, an Iranian news agency reported on Tuesday.

“Currently, Iran has no plans to demand compensation under the terms of the contract,” said Alireza Kameli on the possibility of fining Pakistan due to a nearly one-year delay in importing gas from Iran.

Stressing that Iran never intended to fine Pakistan for failing to take Iranian gas, Kameli asserted, “We expect Pakistan to begin construction of gas pipelines on its territory.”

The Iranian official said that Pakistan had taken no action to meet its obligations of building part of a pipeline to bring natural gas from Iran adding “the normal sequence is to first construct gas pipelines before negotiating with partners on purchasing natural gas.”

He further emphasised that Iran was not concerned over the newly-signed contract between Pakistan and Qatar for transferring LNG.

“We have no worries over the long-term due to the high costs of importing LNG in comparison with construction of pipelines for gas import,” Kameli said.

The $7.5-billion Iran-Pakistan (IP) pipeline was inaugurated with great fanfare in March 2013 — but the project immediately hit quicksand in the form of international sanctions on Tehran, which meant cash-strapped Pakistan struggled to raise the money to build its side.

Tehran has already built its part of the 1,800-kilometre (1,100-mile) pipeline which should eventually link its South Pars gasfields to the Pakistani city of Nawabshah, close to the economic capital Karachi.

As part of an ambitious $46 billion economic corridor linking western China to the Middle East through Pakistan, Beijing recently started work on the section of the pipeline between Nawabshah and the port of Gwadar, close to the Iranian border.

Once this is completed, Pakistan will build the last 80 kilometres to Iran—before the 2018 general election, the government hopes—and it could in future extend the connection northeast to China.

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