Project Focus: Iran-Pakistan-India Gas Pipeline

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Iran-Pakistan-India (IPI), 2700 km, pipeline is aimed to transfer gas from Iran's South Pars fields in the Persian Gulf to Pakistan's major cities of Karachi and Multan and then further to Delhi, India, with an estimated value of USD 7 billion.

Iran-Pakistan-India Gas Pipeline (IPI)

Location Iran-Pakistan-India - IR
Investment 1,500,000,000 USD
Announced 2/15/2002
Completion 12/15/2018
Scope Iran-Pakistan-India (IPI) pipeline project (also called Peace Pipeline) was aimed at constructing a 1,620-mile (2700 km) pipeline from Iran's South Pars fields in the Persian Gulf to Pakistan's major cities of Karachi and Multan and then further to Delhi, India. Because of Iran is the most geographically convenient supplier of gas to both countries; Iran is offering to cover 60% of the construction costs of the pipeline.

The total length of 2700 km project would run 1100 km in Iran and 1000 km to Pakistan and in case of agreement with India it will continue 600 km in Indian Territory. This project is expected to greatly benefit India and Pakistan, which do not have sufficient natural gas to meet their rapidly increasing domestic demand for energy.

A land-based pipeline would be four times cheaper than any other option, even after taking into account transit fee payments to Pakistan. Pakistan could earn about $200-$500 million annually in transit fees from the pipeline and also would be able to purchase natural gas from the pipeline.

The pipeline can carry 110 million cubic meters of gas a day. 50Mln cm meets domestic needs of Iran and the remaining 60Mln cm will go to Pakistan. Iran will initially transfer 30 million cubic meters of gas per day to Pakistan, but will eventually increase the gas transfer to 60 million cubic meters per day.

Development Milestones

2/21/2009 Iran has increased the price of natural gas it plans to sell to India through Iran-Pakistan-India pipeline to USD 7.2 per mBtu, which makes it the most expensive fuel in the country as of date.

Besides, India would have to pay USD 1.1-1.2 per mBtu in transportation cost and transit fee for wheeling the gas through Pakistan, making it the costliest gas in the country, so India had lost interest in the project because it considered that the price proposed by Iran was too high.
3/21/2009 Economic Coordination Committee (ECC) of the cabinet approved a rationalised gas import price equivalent to 80 percent of the international crude oil price, removing the final obstacle in the $7.8 billion gas pipeline project with Iran.
4/9/2009 Pakistan Federal Cabinet accorded approval to the construction of Pakistan-Iran gas pipeline and gave the go ahead for purchase of 750 million cubic feet gas from Iran to fulfill the growing local requirements.
5/25/2009 Iran and Pakistan signed an initial agreement for a USD 7.5bn Iran-Pakistan-India gas pipeline.
6/5/2009 Iran-Pakistan gas pipeline project has been formally signed in Istanbul. The agreement was signed between National Iranian Gas Export Company (NIGEC) and Pakistani Interstate Gas Company (PIGC).
8/11/2009 900 km out of 1100 km in Iran has been constructed, with a cost of $700 m.
1/23/2010 Iran and Pakistan have resolved all issues concerning the long pending IPI pipeline and both the countries are likely to sign a deal soon.
3/17/2010 Iran and Pakistan have signed a deal paving the way for construction to start on the IPI gas pipeline. Under the terms of the deal, Iran will supply 750 million cubic feet a day of gas to Pakistan for 25 years.
3/30/2010 China has expressed its keen interest to invest of $2.5 billion in Iran - Pakistan Gas pipeline, it is interested to extend the Gas Pipeline Project into its area.
3/31/2010 India proposed dialogue with Iran to discuss impediments in implementation of the Iran-Pakistan-India (IPI) gas pipeline. India has been boycotting formal talks on the project since 2007 over security concerns.
4/11/2010 Designing and construction of remaining part of the Iranian sector of Peace Pipeline will start as of May 2010.

The 900 km, 42 inch diameter (IP) gas pipeline will run from the Assaluyen gas field in southern Iran to Pakistan. Requiring a total investment of $US 3.2 billion, the IP pipeline will have a capacity of 750 MMcm/a.
5/16/2010 India has invited Iran for resumption of dialogue on the long discussed IPI project but Tehran is yet to respond. India has proposed a meeting of India-Iran Joint Working Group between May 23-28 in New Delhi but Tehran has not yet confirmed the dates.
5/28/2010 Iran and Pakistan signed a "sovereign guarantee" agreement paving the way for the completion of Iran-Pakistan Gas Pipeline. The groundwork of the project would start soon, as the paper work had been completed.
6/13/2010 Iran and Pakistan formally signed a deal, which commits the Islamic republic to supplying its eastern neighbor Pakistan with natural gas from 2014.
10/25/2010 The Pakistan government has awarded a $55 million feasibility study contract to ILF, of Germany, for the $2.5 billion Iran-Pakistan (IP) gas pipeline project with the condition that the consultant will complete its job in only 12 months, against original plan of 18 months.
11/13/2010 The bidding for Pakistanís part of Iran-Pakistan Gas Pipeline Project would commence shortly,
3/13/2011 Pakistan seeks assistance from China to carry out Iran-Pakistan (IP) gas pipeline project to import gas from Iran.
7/5/2011 Work on Iran-Pakistan gas pipeline is expected to start in six months.
8/10/2011 A feasibility report is being prepared for Iran-Pakistan gas pipeline by NESPAK.
8/17/2011 Pakistan plans to borrow $300 million from local banks to build Pakistani side of the Iran-Pakistan gas pipeline.
8/29/2011 Chinese companies will help Pakistan to complete Iran-Pakistan gas pipeline project.
11/2/2011 A consortium of banks has been formed to finance the Iran-Pakistan gas pipeline project.
11/26/2011 The government of Pakistan's Balochistan Province has agreed to give land for Iran-Pakistan Gas Pipeline project.
2/4/2012 Pakistan will complete IP Project instead of sanctions imposed against Iran.
2/20/2012 Russia has asked Pakistan to award a $1.2 billion pipeline-laying contract of Iran-Pakistan-India Gas Pipeline to its energy giant Gazprom without going into bidding process.
3/5/2012 Pakistan has awarded the $250 million contract for laying of Iran-Pakistan (IP) gas pipeline in its territory to ILF Engineering German company.
3/10/2012 The second phase of lying Iran-Pakistan gas pipeline has been started.
4/7/2012 Russia has come forward to bail out Pakistan to complete the much-touted Iran-Pakistan gas pipeline and has agreed to fully provide both technical and financial help.
4/28/2012 Inter State Gas Systems, an auxiliary organization of Pakistan Petroleum and Natural Resources Ministry, issued pre-qualification of engineering, procurement, construction and commissioning tender for IP pipeline as Iran offered $500 million to Pakistan to build its part of the pipeline.
5/12/2012 Pakistani Inter State Gas Systems invited contractors to pre-qualify for the engineering, procurement, construction, and commissioning contract of a 785 km, 42 inch diameter gas pipeline from Iran to Pakistan.
7/21/2012 Pakistan and Iran have committed to press ahead with the gas pipeline project and constituted a joint working committee to finalize a deal for laying Pakistan's portion of the pipeline by Iran.
8/23/2012 Pakistan planned gas pipeline will reach border point in first half of next Iranian calendar year beginning 20 March 2013.
11/26/2012 Iran-Pakistan gas pipeline will be completed on schedule in 2014 despite the U.S pressures to head off the project.
1/13/2013 Iran has designated a 'clean' private company, which has not been placed under US sanctions, to take a direct contract for laying a pipeline in Pakistan under the Iran-Pakistan gas supply project for which Tehran is extending a $500 million loan.
2/2/2013 Pakistan has awarded Iran's Tadbir Energy Company a contract to build Pakistan part of Iran-Pakistan gas pipeline.
3/2/2013 The IP pipeline is expected to be constructed in 22 months.
3/13/2013 Iranian President Ahmadinejad and his Pakistani counterpart Asif Zardari have officially inaugurated the final construction phase of Iran-Pakistan gas pipeline.
4/2/2013 Pakistan may face economic sanctions over the IP pipeline project with Iran.
4/10/2013 Iran will provide $500 million under a state-to-state arrangement for constructing of the IP Pipeline.
5/29/2013 Iran-Pakistan Pipeline has been delayed due to political transition in the country and now it cannot be completed by the contractual deadline of Dec 31, 2014.
8/20/2013 New Pakistan government will complete IP pipeline.
10/8/2013 Pakistan asked Iran to construct the Pakistani side of the Iran-Pakistan gas pipeline.
12/16/2013 Iran has suspended a USD 250 million loan to Pakistan to build part of IP Gas Pipeline.
1/11/2014 Pakistan would ask Iran to set a new timeframe for completion of Iran-Pakistan (IP) gas pipeline project.
5/12/2014 Iran urges Pakistan to fulfill its commitments regarding a multi-billion-dollar gas pipeline projected to carry natural gas from Iran to its eastern neighbor.
5/27/2014 Iran has no obligation to provide two billion dollars in aid for the construction of gas pipeline to Pakistan.
7/22/2014 The Iran-Pakistan (IP) gas pipeline not to be operational before 2018.
9/23/2014 Iranian Foreign Minister and his Pakistani counterpart in a meeting in New York underlined the need for finalizing Iran-Pakistan gas pipeline.
12/30/2014 The project date of Pak-Iran (IP) gas pipeline project had been extended with the consultation of Iran.
1/10/2015 Oil Minister dismissed claims that Iran has agreed to revoke penalty against Pakistan for its delays in completing the Iran-Pakistan (IP) gas pipeline project, and the new agreements on Iran-Pakistan gas pipeline are not correct.
2/22/2015 Iran has never discussed charging Pakistan penalties for delayed gas pipeline. In its talks with Pakistan for gas exports to this country, Iran never entered the issue of penalties. Iran safeguards its rights in its talks with Pakistan for gas exports to its eastern neighbor.
2/28/2015 Pakistan has not abandoned the Iran-Pakistan gas pipeline project and the country will pursue it once international sanctions are removed that is hindering the plan.
4/14/2015 Iran-Pakistan Pipeline project will go ahead as planned.
5/18/2015 Pakistanís United International Group Mian Shahid think that gas import from Iran is going to become a reality twenty years after Pakistan and Iran signed pipeline deal. The project has important political and economic dimensions for the two neighboring countries but US has remained the biggest obstacle forcing Pakistan to get gas from Turkmenistan.
9/5/2015 Tehran has urged Bangladesh to join the Iran-Pakistan gas pipeline, expressing readiness to study prospects of extending the project to the South Asian nation. The Iran-Pakistan-India gas line could be extended to Bangladesh. Bangladesh government must have a feasibility study on the pipeline.
1/14/2016 Pakistan is ready to complete the short final pipeline spur that would enable it to import natural gas from Iran once sanctions are lifted in February 2016. The delegations from the two countries are expected to meet soon.
1/26/2016 The gas pipeline project to take Iranian natural gas to neighboring Pakistan will become operational provided that banking and executive restrictions are smoothed out. Pakistan will be able to complete its share of the IP pipeline within an 18-month period.
3/27/2016 Iran urges Pakistan to expedite gas pipeline construction. Iran has laid the pipeline up to the border to export gas to neighboring Pakistan encouraging the government in Islamabad to speed up measures to complete its share on its soil.
5/24/2016 Pakistan was committed to the Iran-Pakistan (IP) gas pipeline project but it was still facing sanctions. Dollar transactions have not been allowed and investors are not willing to finance due to the 'snap back' clause, which may lead to imposition of sanctions again on the project. The IP gas pipeline needed an investment of $2 billion, but investors were hesitant to invest.
6/12/2016 The Pakistani minister for petroleum and natural resources has reportedly that a long-awaited gas pipeline project between Iran and Pakistan will complete by 2018. The pipeline had already been completed on the Iranian side with a total investment of above $2 billion, while Pakistan has fallen behind the target to take delivery of gas.
6/26/2016 Pakistan has finalized a contract with China on laying a gas pipeline from Gwadar Port, 80 kilometers from Iran borders, to the Pakistani city of Nawabshah.
7/2/2016 Pakistan has decided to re-negotiate the gas deal inked with Iran under IP gas pipeline project.
8/9/2016 The technical-economic studies over Iran-India sub-sea gas exports pipeline project are ongoing.
11/7/2016 Iran and Pakistan are in contact with each other to complete the Pakistan-Iran (IP) gas pipeline project.
12/19/2016 Pakistan government is to discuss some details on Iran-Pakistan (IP) gas pipeline project. The implementation is to be done on the basis of a segmented approach whereby each country will be responsible for construction of pipeline in the respective territory.
1/29/2017 Iran may cancel a high-profile, Peace Pipeline project, with Pakistan over lengthy construction delays, thus depriving energy-starved Pakistan of some 22 million cubic meters of gas per day. If negotiations fail to come up with a way to feasibly realize the project, the project could be canceled entirely.
5/2/2017 Iranian President called on Pakistan to push for completion of a long-awaited gas pipeline between the two countries. Iran has already completed construction of the Iranian section of a pipeline that allows for exporting gas to Pakistan.
6/8/2017 Russian companies are considering possibility of Iran-Pakistan-India offshore gas pipeline construction. They also are studying the possibility of liquefied natural gas supplies to Pakistan and possible engagement in projects for the modernization of a number of thermal power plants in Pakistan.
9/4/2017 Iran says a third party is needed in the Iran-Pakistan gas pipeline in order to ensure payment of Tehran's gas money by Islamabad.
12/3/2017 Iranian Foreign Minister and his Pakistani counterpart mulled the ways for realizing the project on Iran-Pakistan joint gas pipeline.
12/4/2018 The new government in Pakistan under the leadership of Prime Minister Imran Khan intends to complete the long-delayed Iran-Pakistan gas pipeline. the government will do all it can to complete part of the pipeline that passes from Pakistani territory. An Iranian delegation recently visited Pakistan to discuss the IP project. Pakistan is willing to complete the gas pipeline as it needs energy.

Third Party Needed in Iran-Pakistan Gas Pipeline Project

Iran says a third party is needed in the Iran-Pakistan gas pipeline in order to ensure payment of Tehran's gas money by Islamabad. ...

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