Achi news desk-
- Iranian President Ebrahim Raisi is expected to visit Pakistan on April 22.
- Islamabad faces $18bn penalty for failing to complete project.
- 80-km section to be completed in 24 months at a cost of Rs44bn.
ISLAMABAD: With the expected visit of Iranian President Ebrahim Raisi to Pakistan on April 22, authorities have started construction of the 80 kilometer section of the Pakistan-Iran gas pipeline from Gwadar to a point where it can be connected to Iran. section of the project, The news reported on Sunday.
According to the announcement, quoting a senior official from the Ministry of Energy, the Inter-state Gas Company (ISGS) has already issued tenders requesting the re-validation of the long-overdue verification of the Front End Engineering Design (FEED) survey. by consultants.
The development comes amid apparent US opposition to the bilateral project, along with warnings of possible sanctions, which has faced almost a decade-long delay as it was due to be completed in December 2014 and then implemented in January 2015.
Over the years, Pakistan said that it could not realize the project in its territory because of the sanctions imposed by the United States on Iran, a position that the authorities of Tehran have never subscribed to, saying that there is no justification for the sanctions of the United States.
However, in January, Tehran issued the final notice to Islamabad seeking to complete its side of the pipeline by February-March 2024 or face an $18 billion penalty under the penalty clause of the Gas Purchase and Sale Agreement (GSPA) of the 781-kilometer. project.
According to the official, the installation of the 80-km section of the pipeline is essential to avoid arbitration in France which could lead to the imposition of the above penalty on Pakistan.
Further, he also added that re-verification of early survey and FEED is essential as the 80-km section provides two compressors one at the border and one at Gwadar as the 80-km section of pipelines would initially absorb 100mmcfd from its compared to the 750mmcfd the project is expected to start over 25 years.
Once this process is complete, the authorities will begin the land acquisition process which will then be followed by the award of an Engineering, Procurement and Construction (EPC) contract.
With the project scheduled to be completed in 24 months at a cost of Rs44 billion, the Energy Ministry official noted that the Petroleum Division would seek a substantial amount for the project in the 2024-25 budget from PSDP amid an expected incapacity the Ministry of Finance to provide the necessary funding from the head of the Gas Infrastructure Improvement Service (GIDC).
