Iran-Pakistan gas pipeline could be extended to China

Notwithstanding US opposition to its gas pipeline project with Iran, Pakistan is looking at the possibility of extending it to China as part of a planned economic corridor.

Pakistani and Chinese officials will discuss the laying of the gas pipeline from Gwadar to western China in a meeting to be held here on August 26.

They will also take up a proposal about constructing an oil pipeline between the two countries.

The two sides will sign a memorandum of understanding (MoU) on the economic corridor, which had already been approved by the cabinet.

The upcoming dialogue is a follow-up to Prime Minister Nawaz Sharif's visit to China in the first week of July.

During the trip, Chinese companies had expressed interest in laying the pipeline from the Gwadar Port to western China.

Iran has also expressed interest in stretching the pipeline to China, the Express Tribune reported.

As part of the economic corridor, Gwadar Port will be connected through road and rail links to China which will help enhance trade between the two countries.

Oil and gas pipelines will feature in the economic corridor, providing much-needed boost to economic activities in insurgency-hit Balochistan.

Outlining his ambitious plans, Sharif yesterday expressed optimism on the possibility of transforming Gwadar into a successful free port on the same lines as Hong Kong to attract foreign investment.

Referring to the corridor, he said both sides were taking keen interest in the project as not only China but the entire region would benefit from this mega project. He said Pakistan-China Economic Corridor was future of the country.

He recalled his earlier meetings which discussed the Trade Corridor from Kashgar to Khunjerab and Gwadar and in principal, approved the proposed alignment of Pak-China Trade Corridor, with the directions to further evaluate the proposal in terms of time and cost efficiency.

Pakistan has asked Iran to bear the entire cost of the gas pipeline as it found difficult to arrange funds from aboard following pressure from the US. The US is pressing Pakistan to shelve the IP pipeline and rather focus on the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline.

Iran has already committed USD 500 million for financing Pakistani side of the pipeline but Islamabad insists that Tehran should enhance the credit limit.

Total cost of pipeline construction in Pakistan has been estimated at USD 1.5 billion. To cover part of the cost, the government will award a contract for engineering, procurement and construction (EPC) to Iranian firm Tadbir Energy.

Under the project, Pakistan will import 750 million cubic feet of gas per day (mmcfd) with an option to increase it to one billion cubic feet.