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Pak-Iran talks tomorrow to revise pipeline timeframe

17 January, 2014

ISLAMABAD: Pakistan and Iran will begin crucial talks on Saturday in Tehran to revise the timeframe for completing the IP gas pipeline, Federal Minister for Petroleum Shahid Khaqan Abbasi confirmed on Thursday.

A senior official at the ministry said a Pakistani experts delegation, headed by Managing Director of the Inter-State Gas System (ISGS) Mobin Saulat, was to leave Pakistan for Tehran on Friday.

Pakistan is bound to complete the pipeline in its territory by December 2014 and in case of failure, Islamabad will have to pay a huge penalty. The federal minister for petroleum said a new timeframe was to be discussed as the impact of the US and EU sanctions was quite obvious and it was not possible for Pakistan to arrange the funding required to lay down the pipeline in its territory.

Pakistan will seek to link the new timeframe for materialisation of the project in Tehran dialogue with the lifting of US sanctions on Iran, pleading that it was not possible to arrange the financing of $1.8 billion required to lay down the 781- kilometre pipeline in 11 months with US sanctions threat intact.

It is pertinent to mention here that in the wake of its poor financial health, Iran has also backtracked from its promise to provide $500 million, which it made during the last regime of the Pakistan People's Party.

Meanwhile, two foreign firms General Electric and Siemens, which are in business with Sui Northern and Sui Southern for providing compressors for maintaining required pressure in transmission pipelines system across the country, have threatened to abandon their businesses in Pakistan if Islamabad decides to start implementing the IP gas line project in the presence of US curbs.

The minister also admitted that US companies which provided gas compressors to both gas utilities i.e. Sui Southern and Sui Northern had threatened to abandon their business with the state-owned gas utilities if Pakistan went for the IP gas pipeline.

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