Pakistan sets up consortium for gas pipeline with Iran

Pakistani Petroleum Minister Asim Hussain said a consortium of banks has been formed to finance the Iran-Pakistan Gas Pipeline project.The Pakistani minister said the consortium has already made an offer of $1.40bln loan for the project. Addressing traders at the office of Korangi Association of Trade and Industry (KATI), Hussain said the consortium had been formed with the cooperation of ICB. He also voiced satisfaction with the progress seen in the pipeline project, saying progress in Iran-Pakistan gas pipeline project was moving ahead of its schedule. He said terms were being discussed after the offer of 1.4 billion dollars loan for the project. Hussain had also earlier informed the Pakistani Senate that the pipeline would be completed by 2013, dispelling impressions of external pressure to shelve the Iran-Pakistan gas pipeline project. "First gas flow is targeted by the end of 2014," Hussain said. "The estimated cost is $1.5 billion, but it will be firmed up after completion of a bankable feasibility study. Initial information for financing the project has been exchanged with international investors from China, Russia and the Middle East," he added. In a major breakthrough on March 20, 2009, the Pakistani government approved Iran's proposed pricing formula for gas supplies to the South Asian nation. Subsequently, Tehran and Islamabad signed a final agreement to launch implementation of the project. Tehran and Islamabad also sealed a final contract for the start of Iran's gas exports to Pakistan through the multi-billion-dollar pipeline in spring 2014. The last annex of the agreement for export of Iran's gas to Pakistan was signed on June 13 by former Iranian Oil Minister Massoud Mir-Kazzemi and Managing Director of Pakistan's Inter-State Gas Company Naeem Sharafat in a meeting also attended by the Iranian oil ministry's representative in gas talks with Pakistan Seyed Reza Kassayeezadeh. The 2700-kilometer long pipeline was to supply gas for Pakistan and India which are suffering a lack of energy sources, but India has evaded talks. Last year Iran and Pakistan declared they would finalize the agreement bilaterally if India continued to be absent in the meetings. According to the project proposal, the pipeline will begin from Iran's Assalouyeh Energy Zone in the south and stretch over 1,100 km through Iran. In Pakistan, it will pass through Baluchistan and Sindh but officials now say the route may be changed if China agrees to the project. The gas will be supplied from the South Pars field. The initial capacity of the pipeline will be 22 billion cubic meters of natural gas per annum, which is expected to be later raised to 55 billion cubic meters. It is expected to cost $7.4 billion.