Pakistan, Iran sign gas pipeline deal

Pakistan and Iran have signed a $7.5 billion oil deal.

The Inter-State Gas Systems, a semi-autonomous body that will take care of Pakistan's interests in the import of gas through the pipeline, and the National Iranian Oil Company signed the agreement and an operational accord in the Turkish capital Istanbul yesterday.

The deal was originally envisaged to extend upto India; however, India had been reluctant to join the project due to many factors including US pressure.

Pakistan's Petroleum and Natural Resources Minister Syed Naveed Qamar said in a statement that India is currently not part of the deal. However, he said the heads of agreement dealt with transporting gas meant for India through Pakistani territory if and when India decided to join the project.

Under the heads of agreement, Pakistan will have the right to charge transit fee for gas transported to India. Qamar described the signing of the pacts as a "historic achievement and a milestone towards meeting the energy needs of Pakistan".

The pipeline is being built between Asalooyeh in southern Iran and Iranshahr near the border with Pakistan and will carry the gas from Iran's South Pars field. The pact also addresses the issue of transportation tariff, which will be worked out in line with international practices.

The 900-kilometre pipeline is expected to mitigate the energy crisis in Pakistan.

The volume of 750mmcfd to 1 bcfd gas, expected to be in the system by the middle of 2015, will help overcome the shortage of gas in Pakistan. The 2,700-km pipeline was originally envisaged to transport Iranian gas to energy-deficient Pakistan and India.

However, India backed off many times and did not participate in talks since 2008. Pakistan and Iran declared last year that they would go ahead with the project bilaterally if India maintained its stance of not joining the project.

In the wake of Indian feet dragging on the project, Iran last year indicated inclusion of China in the project, whereas China has also shown interest in the project.

- Asian Tribune -