OREANDA-NEWS. April 27, 2012. Iran, facing tough sanctions imposed by the US and Europe on account of its nuclear programme, has said it is ready to extend USD 500 million to Pakistan for laying the pipeline from the Pak-Iran border to Nawabshah under the IP gas pipeline project.
 
It also expressed its readiness to export 70,000 to 80,000 barrels per day crude oil to Pakistan during the recent meeting between the officials of the two countries held in Tehran.
 
A consortium headed by the Industrial and Commercial Bank of China (ICBC) recently refused to provide financial advisory services for the project mainly because of the severe US opposition.

Pakistan's seven-member delegation, headed by joint (development), ministry of petroleum and natural resources has visited Iran and held talks on vital issues pertaining to IP gas pipeline funding, import of crude oil and exploring avenues to invest in exploration and production activities in Iran, a senior official who was part of the talks in Iran told The News.
 
"Iran also invited OGDCL and PPL (Pakistan Petroleum Limited) to take part in exploration and production activities in Iran," he said. Iran had earlier made an informal offer to provide USD 250 million for the pipeline. The Pakistani delegation went to Iran to get solid promise for funding the pipeline, but the Iranian authorities said they were ready to jack up the realer offer to USD 500 million.
 
Pakistan is very much interested in importing 70,000-80,000 bpd crude oil in exchange for food items. Iran's refineries are not in a position to refine the huge quantum of crude oil because of the monster of circular debt.
 
"We will now sensitise the top leadership of the ministry about the renewed offer of Iran so that the political leadership could take timely policy decision," the official said. To a question he said that an Iranian delegation would visit Pakistan next week for further talks.
 
The gas pipeline from MP 250, a point at the Pak-Iran border, to Nawabshah with 800 kilometres length is to be commissioned by December 2014 and the project will inject 750 mmcfd of gas into Pakistan's system.
 
The gas will be used for power generation, reducing reliance on furnace oil as fuel for thermal power. Pakistan is facing a huge gas deficit of over 2 billion cubic feet per day as its production stands at 4.2 billion cubic feet. The import of gas from Iran will help ease the gas deficit to a reasonable level.
 
In case the project get delayed beyond the deadline of December 31, 2004, Pakistan will have to pay USD 1 million per day to Iran as penalty. To a question the official said Russia has also been approached to fund the project but it has not made any commitment yet. Russia wants Pakistan to set aside the Public Procurement Regulatory Authority's (PPRA) rules to complete the mega project for which international bidding is a must under PPRA rules. "The Russian demand will be placed in the next ECC meeting for approval so that the project could be completed as soon as possible," he said.