Tayyebnia, Pak Minister Talk Energy at IMF/WB Meet

Tayyebnia, Pak Minister  Talk Energy at IMF/WB MeetTayyebnia, Pak Minister  Talk Energy at IMF/WB Meet

Pakistan and Iran have agreed to hold a Joint Economic Commission in Islamabad to consolidate bilateral cooperation between the leaderships of the two countries. The focus of this cooperation will be on development of gas pipeline and electricity.

Finance Minister Senator Mohammad Ishaq Dar met the Iranian Finance Minister Ali Tayyebnia while attending World Bank and International Monetary Fund (IMF) meetings in Washington. Both ministers discussed matters of mutual interest.

Senator Dar informed his Iranian counterpart that the government had approved the 700-kilometer section of the pipeline from Gwadar to Nawabshah and that Pakistan was considering various alternatives to meet the financial requirements, the Express Tribune reported.

According to a press statement issued by the finance ministry, the Iranian finance minister appreciated Pakistan’s resolve in completing 700km portion of Iran-Pakistan Gas pipeline and expressed hope that in future more pipeline projects between the two countries will materialize.

Earlier in September, the Express Tribune quoted the Pakistani Petroleum Minister Shahid Khaqan Abbasi as saying that Pakistan is seeking an alternative for the Iran-Pakistan (IP) pipeline due to the US economic sanctions threatening their transactions with Iran.

Under the new plan, Iran will convert natural gas into liquefied natural gas (LNG) and then export it to Pakistan by using terminal facility of Oman.  “We may also use Oman’s LNG terminal facility to import gas from Iran,” a source said, adding that Pakistan would not face shipping problems as Oman is close to Pakistan. "Another plan is to set up an LNG terminal at Gwadar and laying pipeline from Gwadar to Nawabshah in Sindh," he added.

However, Iran's deputy oil minister called Pakistan's offer to import gas from Iran in the form of LNG 'illogical' and said the deal is against the benefits of the two sides.

"It doesn’t make sense to have exports to a bordering country via an intermediary as long as we can carry out the operations directly," said Ali Majedi on Pakistan's plan to convert Iran's natural gas into LNG and import the LNG via terminals in Oman.

Iran has laid 900 kilometers of the total 1200 kilometers of gas pipeline to Pakistan, also known as the Peace pipeline; therefore it wouldn’t be profitable for both countries to let the pipeline remain idle, Majedi said.

According to a report by ISNA, the pipe laying project within Iran's border was carried out at a cost of $2.5 billion dollars, however, the 780 km pipeline due in Pakistan has not been laid as the Pakistani government faced difficulty in funding the project.

The preliminary agreement between the two countries stipulates that if the gas export to Pakistan does not commence by December 31, Pakistan must pay Iran $200 million per month.