Chinese chairman See Tzinpin will sign the agreement to build the gas pipeline from Iran to Pakistan in Islamabad in April, reported Pakistani officials. The project has become possible thanks to lifting of sanctions from Iran and it will help solve the problem of shortage of energy resources in Pakistan.
The project names Peace Pipeline will also help to improve relationships between Iran and Pakistan. They have been difficult for decades, because of Pakistan’s ties with US and Saudi Arabia, which are Iran’s long-lasting adversaries.
Iran believes that the Iranian section about 900 km-long has been already built and the authorities insisted that Pakistan should build its own section. But US threatened to impose sanctions against Pakistan, if it agrees to implemen the project.
“We have started the pipeline construction,” Pakistani Oil Minister Shakhid Khakan Abbasi told The Wall Street Journal.
Pakistan has been negotiating with China Petroleum Pipeline Bureau, daughter company of China National Petroleum Corporation (CNPC). It must build the pipeline about 700 km long from Gvadar port on the west of the country to Navabshakh city in the southern province of Sind. There it will be connected to the existing network of the gas pipelines.
Pakistan will build the remaining section 80 km long from Gvadar to the Iranian border. Two years will be needed for the gas pipeline construction and its cost will total $1.5-1.8 billion. It could go up to $2 billion, if construction of LNG terminal in Gvadar is included into the project. As a result, gas delivered to Pakistan will be enough to generate 4500 MWt of power, which will let the counry reducing its deficit by half.
Pakistan considers Iranian gas the cheapest and most accessible energy source. It is also going to buy LNG from Qatar and is involved in the delayed talks on the gas pipeline from Turkmenistan to India and Pakistan via Afghanistan.
The Iranan-Pakistani gas pipeline project was planned in 1995. It was initially planned to build the pipeline further to India, but it refused to take part in the project in 2009. Iran accused the US of pressuring India. For a long time US also tried to persuade Pakistan to refuse of the project in favor of construction of the gas pipeline from Turkmenistan.
For many years Pakistan has been a strategic partner of China. Now the countries plan to create the “economic corridor” connecting Gvadar port with a network of automobile roads and railways with the southwest of China. Gvadar port is operated by China. The ambitious program, which also includes construction of power stations, will demand a total of about $40 billion of investments. It will be discussed during the visit of the Chinese leader to Islamabad, which has been cancelled twice and is now scheduled for April 19. The Iranian-Pakistani gas pipeline has nothing to do with this economic corridor.
“China has necessary knowledge and willingness to work here. Moreover, work in this region is not considered very safe,” said Khamayun Khan, Director of Islamabad-based Pakistan Council on China, which as an independent research centre.
