China to Finance $2b IP Pipeline

China to  Finance $2b IP PipelineChina to  Finance $2b IP Pipeline

China will reportedly finance the Iran-Pakistan (IP) natural gas pipeline from Iran, home to the world’s second largest reserves, to energy-deprived Pakistan.

The final deal is to be signed during the long-sought visit of Chinese President Xi Jinping to Islamabad in April, RT reported.

“We’re building it. The process has started,” Pakistani Petroleum Minister Shahid Khaqan Abbasi said.

First proposed over 20 years ago, the 1682km pipeline will transfer gas from Iran to the Pakistani cities of Gwadar and Nawabshah.

Karachi, the country’s biggest city of 27.3 million, will also be connected via local energy distribution systems already in place.

Up to now, about 80 percent of the pipe-laying on Iranian side of border (1,100km from a total 1,400km) has been completed. The Pakistani side has yet to do its own 780km pipe-laying part.

The project could cost up to $2 billion if a liquefied natural gas (LNG) port is constructed at Gwadar. Otherwise, the project to complete the Pakistani pipeline will cost between $1.5 billion to $1.8 billion, according to the report.

Pakistan is in negotiations with China Petroleum Pipeline Bureau, a subsidiary of Chinese energy major China National Petroleum Corporation, to finance 85 percent of the project; Pakistan will pay the rest.

The original plan envisioned the pipeline continuing to India, but Delhi dropped out in 2009.

Pakistan, a country of 199 million people faces intermittent blackouts in major cities, and Iran is looking for a place to export its soon-to-not-be-banned gas.