The Pakistan section of the Iran-Pakistan (IP) gas pipeline will take two years to complete, Pakistani Minister of State for Petroleum and Natural Resources Jam Kamal Khan stated.
The Pakistani government on Monday informed the National Assembly that it will take around 24 months to lay the Pakistan section of the IP gas pipeline if things remained normal, while the deadline will expire by the end of December 2014 – the timeline for the first flow of gas, according to Business Recorder.
“As per IP agreement, $3 million penalty will be imposed on Pakistan per day for not laying the pipeline with the stipulated time,” Jam Kamal Khan added.
Iranian Deputy Minister of Petroleum in International and Commercial Affairs Ahmad Khaledi, in a letter on May 27, reminded Pakistan government that after a government-to-government cooperation agreement between the two countries, they were supposed to select entities to commence work on the gas pipeline immediately.
“Iran has already done this, but it is still waiting for any action from Pakistan side. Since time is too short, your prompt instruction in this regard is highly appreciated,” the Iranian minister said.
On February 20, the construction of the Pakistan section of the IP gas pipeline started in the presence of oil ministers of the two countries.
The Iran-Pakistan gas pipeline, projected to cost $1.2-1.5 billion, is aimed to export a daily amount of 21.5 million cubic meters of Iranian natural gas to Pakistan.
Iran has already constructed more than 900 kilometers of the pipeline on its soil.
Iran has proposed a $250-million-dollar loan to Pakistan to help finance the project. Iran has pledged to secure the required $500 million to complete the Pakistani section of the project and the rest will be provided by the Pakistan government.
It has been planned that Iranian and Pakistani companies to form a joint venture to finance the project.
According to the project proposal, the pipeline will begin from Iran’s Assalouyeh Energy Zone in the south and stretch over 1,100 km through Iran. In Pakistan, it will pass through Baluchistan and Sindh.
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