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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--At the beginning of March, it was reported that if the Iran-Pakistan gas pipeline project continued to move forward, sanctions might be brought against Pakistan. The U.S. State Department qualified the position by saying that sanctions would only become effective if Pakistan finalized the deal with Iran. In response, Pakistani President Asif Ali Zardari said that his government would continue to pursue the $7.5 billion deal, despite U.S. opposition.
Iran already has constructed 900 kilometers of the pipeline on its side of the border between the two countries and is offering funding assistance to Pakistan to enable construction of its leg of the pipeline.
In February, the oil ministers of the two countries agreed on the formation of a joint contracting company to complete the project in the next 15 months and bring it on stream by December 2014.
Also in February, Pakistan assured Iran that it would collect $1 billion through gas infrastructure development cess (tax) from consumers to finance the construction of the pipeline, which will lead to reductions of 20% to 25% in tariffs following the start of gas imports at the end of 2014.
It was reported that $379 million was needed immediately to initiate work on the Pakistan side: $90 million for purchasing pipes, $45 million to set up a compression station, $56 million for construction work, $35 million for land acquisition and $152 million for duties, cost of transport and other procurements.
Iran is providing a financing facility of $250 million, which could increase to $500 million. Inter State Gas Systems (ISGS) will enter into an engineering, procurement and construction contract with Iran's Tadbir Energy.
On Monday this week, President Zardari and Iranian President Mahmoud Ahmadinejad officially inaugurated the $1.5 billion pipeline, which will stretch for 7,871 kilometers through Pakistan.
Gas will be sourced from the South Pars gas field in Iran's southern province of Bushehr. The initial capacity will be 22 billion cubic meters of natural gas annually, which will be phased up to 55 billion cubic meters.
For related information, see May 1, 2012, article - Pakistan Pushes Tendering of Gas Pipeline with $500 Million from Iran.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
Iran already has constructed 900 kilometers of the pipeline on its side of the border between the two countries and is offering funding assistance to Pakistan to enable construction of its leg of the pipeline.
In February, the oil ministers of the two countries agreed on the formation of a joint contracting company to complete the project in the next 15 months and bring it on stream by December 2014.
Also in February, Pakistan assured Iran that it would collect $1 billion through gas infrastructure development cess (tax) from consumers to finance the construction of the pipeline, which will lead to reductions of 20% to 25% in tariffs following the start of gas imports at the end of 2014.
It was reported that $379 million was needed immediately to initiate work on the Pakistan side: $90 million for purchasing pipes, $45 million to set up a compression station, $56 million for construction work, $35 million for land acquisition and $152 million for duties, cost of transport and other procurements.
Iran is providing a financing facility of $250 million, which could increase to $500 million. Inter State Gas Systems (ISGS) will enter into an engineering, procurement and construction contract with Iran's Tadbir Energy.
On Monday this week, President Zardari and Iranian President Mahmoud Ahmadinejad officially inaugurated the $1.5 billion pipeline, which will stretch for 7,871 kilometers through Pakistan.
Gas will be sourced from the South Pars gas field in Iran's southern province of Bushehr. The initial capacity will be 22 billion cubic meters of natural gas annually, which will be phased up to 55 billion cubic meters.
For related information, see May 1, 2012, article - Pakistan Pushes Tendering of Gas Pipeline with $500 Million from Iran.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
