Avoiding pressure from the United States, Pakistan and Iran have committed to press ahead with the gas pipeline project and constituted a joint working committee to finalize a deal for laying Pakistan's portion of the pipeline by Tehran.
Iran has also offered to set up an oil refinery in Pakistan. Earlier it had discussed a plan to lay an oil pipeline to Gwadar where a refinery would be set up to process crude oil.
Until one and a half years ago, two Pakistani refineries had been importing Iranian crude oil on three-month credit but supply stopped afterwards as banks showed reluctance to open letters of credit following imposition of US sanctions on Tehran.
Sources said that Iranian authorities reiterated their resolve to provide technical and financial help for constructing the gas pipeline. A joint working group has been formed to consider different options for Iran to lay the pipeline. Tehran had already committed to provide USD 250 million and was willing to arrange more financing through Chinese commercial banks.
The source said that the working group will also discuss the option of financing offered by Iran. German based firm ILF has completed detailed engineering design of the pipeline and according to an interim feasibility report the project will cost USD 1.2 billion to USD 1.5 billion.
He said that if local companies participate in the project, the cost will come down and if foreign firms undertake the venture the cost will go up. There is also an option under which local and Iranian companies will join hands to complete the project. Though Iran is an option to strike deal on government-to-government basis, we are also discussing the construction of the pipeline with China and Russia.
Meanwhile, the Pakistan and Iran joint committee on oil, gas and energy held a meeting on July 17th and 18th 2012 in Islamabad to discuss bilateral cooperation in oil and gas sectors.
The Iranian team was headed by Dr Ahmad Khalidi deputy minister of Internal Affairs, Ministry of Petroleum while Pakistani team was led by Mr Abid Saeed additional Secretary Ministry of Petroleum and Natural Resources.
The Iranian side expressed its intention to invest in hydrocarbon exploration and production including upstream and midstream sectors. It also invited Pakistani companies to invest in oil and gas exploration and production in Iran.
Source - Agencies
(www.steelguru.com)
