IP Pipeline Contract to Be Signed Next Week

IP Pipeline Contract to Be Signed Next Week
IP Pipeline Contract to Be Signed Next Week

The final contract for construction of a major part of Iran-Pakistan (IP) gas pipeline will be signed between Pakistan and a Chinese company during the Chinese President Xi Jinping's visit to Islamabad next week, Pakistan's Minister of Petroleum and Natural Resources, Shahid Khaqan Abbasi, said in an interview with IRNA on Saturday.

During Xi's two-day visit, a $3 billion contract is slated to be signed on Monday with China Petroleum Pipeline Bureau, a subsidiary of the state-owned China National Petroleum Corporation (CNPC), for laying the 700km gas pipeline from the western Pakistani port of Gwadar to Nawabshah in the southern province of Sindh, where it will be connected to Pakistan’s existing gas-distribution pipeline network.

The 70 km pipeline from the Iranian border to Gwadar will be built by two Pakistani companies, Sui Northern Gas Pipelines Limited and Sui Southern Gas Company. The project is expected to be completed within 30 months, Abbasi noted.

So far about 80 percent of the pipe-laying on the Iranian side of the border (1,100km from a total 1,400km) has been completed.

The pipeline will bring much-needed gas to Pakistan, which suffers from a crippling electricity deficit because of a shortage of fuel for its power plants. Pakistan has been negotiating for months behind the scenes with China to build the Pakistani portion of the pipeline.

The final testing of the Iran-Iraq gas pipeline is also underway and gas supply to the Arab neighbor will commence in May, according to a report by IRNA.

The report highlighted that the final testing on 50km of the pipeline has commenced and testing the 47km will start in the near future. Iran is to supply four million cubic meters of gas per day with capacity to increase the volume up to 35 mcm/d. Iran and Iraq agreed to postpone exports from winter to the second quarter of 2015 given the political insecurity in the region.