Pakistan and Iran has so far set aside persistent US pressure coupled with warning of further sanctions, and are now very near to finally ink an agreement for the award of EPC agreement to an Iranian company, which will lay 781 km long Pakistan's portion of IP gas pipeline. The two sides despite stiff US Opposition are going to arrange a ground breaking ceremony of much awaited IP gasline project on March 11th at Pak-Iran border at Gabd. President Asif Ali Zardari and his Iranian counterpart Mahmoud Ahmadinejad will gather at Pak-Iran border at Gabd on March 11th to participate in the groundbreaking ceremony of IP gasline project, a senior official at Petroleum Ministry told this scribe during an exclusive communication.
Sources privy to the development told this scribe that since the board of Pakistan's Inter-State Gas Systems (ISGS) has now given its approval to the initial signing of ISGS with Iranian firm Tadbir Energy done at Tehran in February for the award of an EPC contract so now the Steering Committee on IP gasline project will formally submit its ceremonial nod on Monday before the ground breaking ceremony of the project.
After the approval of ISGS board, legal constraints and lacuna have ended, sources said, adding, that high profile delegation of Tadbir Energy is in the town from last few days to finalise the agreement on IP gas pipeline project. Under the agreement, Iranian firm for the construction of said pipeline would be bound to initiate EPC. Tadbir Energy faces no sanctions from any foreign government. It is controlled by the Imam Khomeini Foundation, one of Iran's largest charitable groups. The IP gasline project that will be completed by December 2014 will first bring 750 million cubic feet gas per day through 781-kilometre-long pipeline with a diameter of 42 inches, and later on, the gas flow will increase to 1 billion cubic feet per day.
Iranian gas, which will be consumed by power plants to generate around 4,000 megawatts of electricity. The agreement between both brother states Pakistan-Iran would be functional for 20 years and there would be a five-year extension.
"Both sides so far withstood tremendous pressure from US but did not get deterred to back off from their stance. The two sides finally agreed to sign what many duly believe is a monumental agreement. Both brethren have duly abided by the greatest responsibility on their shoulders to shrug off the unwarranted pressure, " as rightly appreciated by an official at Foreign Office.
Though at present Pakistan is scrambling to secure funds for the pipeline project amid US opposition in the wake of sanctions imposed on Iran over its nuclear programme, yet work on the Iran-Pakistan gas pipeline on the Iranian side is completed.
During the series of talks held so far to finalise the deal, the Inter-State Gas Systems and the Iranian firm reached on a unanimous consensus that state-owned SSGCL and SNGPL would initiate mechanical works while the FWO, a subsidiary of the Armed Forces, would carry out civil works of the project while laying the pipeline from Gabd to Nawabshah inside Pakistan. Cost of installing gas pipeline on a single kilometre and the interest rate have already been settled.
The cost would stand at Rs 190 million and the interest rate 3 per cent on $500 million loan.
So far, Iran had demanded four per cent interest rate on $500 million loan and Pakistan had bargained for three per cent interest rate over the committed loan, which according to sources have mutually resolved by both countries amicably.