Pak-Iran sign ‘Peace Pipeline’ deal

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TEHRAN (AFP/Reuters) – Iran and Pakistan formally signed on Sunday an export deal which commits the Islamic republic to supplying its eastern neighbour with natural gas from 2014.

The contract is the latest step in completing a $7 billion “peace pipeline” deal between Iran and Pakistan within the next four years.

“This is a happy day,” Iran’s Deputy Oil Minister Javad Ouji told reporters at the contract signing ceremony in Tehran.

“After decades of negotiations, we are witnessing today the execution of the agreement… to export more than 21 million cubic metres (742 million cubic feet) of natural gas daily from 2014 to Pakistan,” he added. He said that from Monday, Iran will start building the next 300-kilometre leg of the pipeline from the southeastern city of Iranshahr to the Pakistani border, through the Iranian port of Chabahar.

Iran has already constructed 907 kilometres of the pipeline between Asalooyeh, in southern Iran, and Iranshahr, which will carry natural gas from Iran’s giant South Pars field.

Pakistan’s Deputy Energy Minister Kamran Lashari, who was present at the signing ceremony, said that Islamabad will conduct a one-year feasibility study for building its section of the pipeline.

It will then “take three years for constructing the 700-kilometre pipeline” from the Iranian border to the Pakistani city of Nawabshah, he added.

Pakistan plans to use the gas purchased from Iran for its power sector.

Ouji said that Iran, which has the second largest gas reserves in the world, currently produces 600 million cubic metres of natural gas, of which 430 to 440 million cubic metres is consumed domestically.

It plans to raise output to 900 million cubic metres over the next three years with the expansion of South Pars and hopes to further hike it to 1,100 million cubic metres by 2015.

Dubbed the “peace pipeline,” the project has been planned since the 1990s and originally would have extended from Pakistan to India. But New Delhi pulled out of the project last year.

The United States has tried to discourage India and Pakistan from any deal with Iran because of Tehran’s disputed nuclear programme, which the West fears is a cover to build bombs.

Iran, hit by a fourth round of UN sanctions on Wednesday over its refusal to suspend its uranium enrichment activities, denies any such ambitions.

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