A.Rafay
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Russia and China appear to be losing the race for the $1.5 billion Iran-Pakistan (IP) gas pipeline project as Islamabad and Tehran have agreed to sign a $250 million loan agreement next month for laying Pakistans portion of the pipeline.
We have finalized arrangements for a loan of $250 million from Iran in a deal between the two governments. The final agreement will be signed after Eid during visit of an Iranian delegation to Islamabad, .
This comes despite pressure from the US, which opposes big commercial deals with Iran because of Tehrans alleged nuclear program. Iran insists that its program is peaceful.
Iran has also offered an additional loan of $250 million from its commercial banks for the pipeline. Tehran will also provide material support.
According to sources, Iran will provide a total of $500 million to finance the gas pipeline and the remaining amount will be arranged by Pakistan through collection of gas infrastructure development tax, a kind of tax being paid by domestic gas consumers.
The government is expecting to collect Rs30 billion worth of tax from the consumers in the current fiscal year 2012-13.
As US has warned foreign companies that they will face sanctions if they participate in the IP pipeline project, Pakistani and Iranian gas companies will form a joint venture to lay the pipeline in Pakistan, the source said.
German-based firm ILF has completed engineering design of the pipeline and an interim feasibility report has put the project cost between $1.2 and $1.5 billion.
If the project gets under way with the participation of local companies, the cost will fall, said an official.
Iran has already offered Pakistan to lay the entire pipeline as the latter has been facing problems in attracting funds from countries like China and Russia.
Many people believe that Irans offer is the best option available amid pressure from the US, which has warned that those assisting the project will face possible sanctions.
According to Iranian authorities, the pipeline is expected to reach the zero point at the border in the first half of next Iranian calendar year, beginning March 20, 2013.
In a statement, National Iranian Gas Company has said work has come to an end on the 56-inch seventh gas trunk line from Iranshahr, southeast of Iran, to the Pakistan border and Zahedan.
IranOilGas Network News: Iran to finance IP gas pipeline
We have finalized arrangements for a loan of $250 million from Iran in a deal between the two governments. The final agreement will be signed after Eid during visit of an Iranian delegation to Islamabad, .
This comes despite pressure from the US, which opposes big commercial deals with Iran because of Tehrans alleged nuclear program. Iran insists that its program is peaceful.
Iran has also offered an additional loan of $250 million from its commercial banks for the pipeline. Tehran will also provide material support.
According to sources, Iran will provide a total of $500 million to finance the gas pipeline and the remaining amount will be arranged by Pakistan through collection of gas infrastructure development tax, a kind of tax being paid by domestic gas consumers.
The government is expecting to collect Rs30 billion worth of tax from the consumers in the current fiscal year 2012-13.
As US has warned foreign companies that they will face sanctions if they participate in the IP pipeline project, Pakistani and Iranian gas companies will form a joint venture to lay the pipeline in Pakistan, the source said.
German-based firm ILF has completed engineering design of the pipeline and an interim feasibility report has put the project cost between $1.2 and $1.5 billion.
If the project gets under way with the participation of local companies, the cost will fall, said an official.
Iran has already offered Pakistan to lay the entire pipeline as the latter has been facing problems in attracting funds from countries like China and Russia.
Many people believe that Irans offer is the best option available amid pressure from the US, which has warned that those assisting the project will face possible sanctions.
According to Iranian authorities, the pipeline is expected to reach the zero point at the border in the first half of next Iranian calendar year, beginning March 20, 2013.
In a statement, National Iranian Gas Company has said work has come to an end on the 56-inch seventh gas trunk line from Iranshahr, southeast of Iran, to the Pakistan border and Zahedan.
IranOilGas Network News: Iran to finance IP gas pipeline
