Iran and Pakistan agree to extend a gas pipeline project
IRNA reported that Iran and Pakistan have agreed on a two-year extension for completion of a joint gas pipeline project.
Official sourced said that Iran has agreed to an extension after Pakistan faced difficulties regarding construction of IP pipeline on its own side of the border.
Islamabad has also reportedly said that Tehran has agreed to suspend the penalty clause of the agreement. According to the penalty clause, Pakistan shall have to pay USD 2-3 million per day to Iran as of January 1st 2015 if it fails to meet the pipeline construction deadline.
The officials said that “The deadline of the IP gas pipeline project was December 31st 2014 and due to mutual agreement Iran has not imposed any penalty on Pakistan. Now both the countries have decided to complete gas pipeline project by the end of 2016 or in the beginning of 2017.”
They said that “Next month, Pakistan plans to start construction work on 700-kilometer-long Gwadar-Nawabshah Liquefied Natural Gas project, which would require an extension of only 70 KM to connect with the Iranian side of the pipeline.”
To complete the construction of Gwadar-Nawabshah LNG pipeline Pakistan on government to government basis a contract has been awarded to Chinese oil/gas company China Petroleum Pipeline Bureau. Not only will the Chinese company lay the pipeline but it will also build an LNG terminal. The total cost of the LNG pipeline and terminal is estimated at USD 2.5 billion.