Iran Tracker

Iran and Pakistan signed a tariff and tax agreement in Turkey paving the way for the construction of the Iran-Pakistan Pipeline. Construction will begin immediately and the work should be completed by 2014. Under the terms of the deal, Iran will provide Pakistan 750 million cubic feet of gas per a day from its South Pars gas field for twenty-five years. The gas will be piped through Balochistan before reaching Pakistan's gas grid at Nawabshah.

India declined to participate in the deal citing concerns about energy security. The agreement does not state how the two countries will finance the project, especially given U.S. sanctions against business activity in Iran’s energy sector. Russian energy giant, Gazprom, has reportedly met with Pakistani and Iranian officials. The project will cost an estimated $7.5 billion and involve the National Iranian Gas Company (NIGC) and Pakistan’s Sui Northern Gas Pipeline and Sui Southern Gas Company Limited (SNGPL, SSGCL).

Tehran recently announced that it plans to begin work on its part of the pipeline in mid May and hopes to have it complete  before the beginning of the next Iranian year which will be in March of 2011. Of the 2100 kilometers of pipeline, 1000 will be in Iran and 1100 will be in Pakistan, with Iran only needing to complete another 250 km of pipeline. In late May of 2010, Iran and Pakistan signed a $7.5 billion sovereign guarantee over the pipeline, confirming their determination to complete this project. Pakistan has also announced that it will not bow to American pressure to end the pipeline deal, even after the most recent round of American and United Nations sanctions against the Islamic Republic.

• Country: Pakistan
• Client: National Iranian Gas Company
• Contractor: Sui Northern Gas Pipeline (SNGPL), Sui Soutern Gas Company Limited (SSGCL)
• Amount (Current Dollar Value): $7.5 billion