Iran withdraws $500 mil funding offer to Pakistan for gas pipeline project

Karachi (Platts)--13Dec2013/517 am EST/1017 GMT


Iran has said that it would not be able to finance the Iran-Pakistan gas pipeline project, Pakistan's Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi told reporters on Thursday evening.

Following his visit to Tehran over December 8-9, Abbasi said Iran expressed its inability to provide the funding it had offered earlier in two tranches of $250 million each to build Pakistan's portion of the gas pipeline.

"However, we are committed and will make the IP gas pipeline," Abbasi said, adding that Iran was ready to supply the gas once the pipeline is completed. Iran has already invested $2 billion to build its part of the pipeline.

Pakistan, however, is finding it tough to find the funding for its part of the pipeline due to US sanctions against Iran which makes financiers and contractors wary of joining the project.

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Working groups from both countries would meet next week to consider different parameters in an attempt to keep the project going, Abbasi said, adding that details were expected to be finalized within two months.

--Haris Zamir, newsdesk@platts.com
--Edited by E Shailaja Nair, shailaja.nair@platts.com

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