Natural Gas Asia

Tuesday, May 23, 2017

Pakistan Ratifies Iran-Pakistan Pipeline Agreement

Pakistan’s federal government on Wednesday approved a $1.5 billion government-to-government deal with Iran for laying the 785 km Pakistan segment of a pipeline, Dawn newspaper has reported.

The contract will be signed by Iran’s Tadbir Energy and Pakistan Interstate Gas Company (ISGC) for engineering, procurement, construction and financing of the project. Iran will provide a $500 million financing payable in 20 years and Tadbir Energy will lay the pipeline through its sub-contractors, the newspaper said.

Prime Minister’s Adviser on Petroleum and Natural Resources Asim Hussain said that because it was a government-to-government agreement, there was no need for competitive bidding.

Almost half of the remaining $1bn financing will be arranged through a Chinese loan and about $500m to be raised by Pakistan through gas infrastructure development cess (GIDC).