Pakistan, Iran sign gas pipeline deal

Pakistan and Iran have finalised a deal for the construction of a much-delayed pipeline to pump Iranian natural gas to the energy-starved South Asian country, the Pakistan petroleum ministry said.

Pakistan, Iran sign gas pipeline deal

Pakistan and Iran have finalised a deal for the construction of a much-delayed pipeline to pump Iranian natural gas to the energy-starved South Asian country, the Pakistan petroleum ministry said.

The $7.6 billion project is crucial for Pakistan to avert a growing energy crisis already causing severe electricity shortages in the country of about 170 million.

Pakistani and Iranian petroleum officials signed the agreement on Friday evening in Islamabad, the ministry said.

"The project is now ready to enter into its implementation phase," the ministry said in a statement.

Pakistan said the first gas is scheduled to flow by the end of 2014 and expects its total cost on the project to be $1.65 billion, funded through private and state capital.

Under the deal, Pakistan will import from Iran 750 million cubic feet of gas daily for 25 years. The amount could be increased to 1 billion cubic feet a day and the deal could be extended five years if needed, the ministry said.

The ministry said the imported gas would help generate about 5,000 MW of power.

The pipeline would connect Iran's South Fars gas field with Pakistan's southern Baluchistan and Sindh provinces.

Iran has the world's second-largest gas reserves after Russia. But sanctions by the West, political problems and construction delays have slowed its development as an exporter.


Reuters

Last Mod: 29 Mayıs 2010, 13:58
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