Iran’s deputy oil minister, Ali Majedi, said Monday that Pakistan must finance its part of the pipeline that would enable it to buy gas from the neighbouring country.
Majedi’s remarks come after Pakistan’s Oil Minister Shahid Khaqan Abbasi asked Iran to stump up $2 billion to finish the construction of the pipeline.
The $7.5-billion project launched in 2010 has drawn threats of US sanctions and run into repeated problems, including major financing issues.
“We did not make such a commitment to help Pakistan with $2 billion for the construction of the pipeline,” Majedi said, quoted by Fars news agency.
He argued that based on initial agreements each side “must bring its own share” in financing the project, adding the “Pakistanis need Iran’s gas and they should accelerate their work.”
Construction on the Iranian side of the border is almost complete, but Pakistan has run into repeated problems financing the 780-kilometre section to be built on its side.
Investors and other governments are reluctant to get involved in the project because of the threat of breaching international sanctions against Iran.
Once completed, the project which aims to ease Pakistan’s chronic gas and electricity shortages would allow Iran to export 21 million cubic metres of gas per day.
Iranian Oil Minister Bijan Zangeneh said last week he had “no hope” for the gas supply deal with Pakistan because of the financial problems.
Zangeneh’s comments prompted his Pakistani counterpart to insist the project would be completed and there was “no chance to abandon the pipeline project, because we need it”.
Iran, which has the world’s second-largest gas reserves, currently produces about 600 million cubic metres (21.2 billion cubic feet) of gas per day, almost all of which is consumed domestically.
Its only foreign client is Turkey, which buys about 30 million cubic metres per day.