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Pakistan, Iran to jointly develop gas pipline implementation plan

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1 year ago

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  • Pakistan renewed its commitment to project: minister.
  • Iran offers to export more electricity for Gwadar, Chaman.
  • Both countries decide to explore ways to implement project.

ISLAMABAD: In a positive development, Pakistan and Iran have decided to jointly develop a consensus implementation plan for the Iran-Pakistan (IP) gas pipeline, The News reported Friday. 

The decision came after a meeting between two sides in Tehran during which Islamabad had sought relaxation on the Feb-March 2024 deadline to avert the penalty of $18 billion for not laying down a pipeline in its territory. 

Iran had asked Pakistan last year to construct a portion of the gas line project in its territory till February-March 2024 or pay a $18 billion penalty.  

The negotiations regarding the plan would begin in the next two to three weeks.

Despite this, the Iranian deadline to move international arbitration by September 2024 would remain in the field allowing that much time to explore bilateral avenues.

Energy Minister Muhammad Ali told The News, “We have held constructive talks in Tehran and Pakistan has renewed its commitment to the project.

“We have convinced the neighbouring country of our deficient energy status for which we also have enhanced work on the TAPI gas line project. The Iranian side listened to us carefully and agreed to increase active engagements to enable the IP project.”

During the talks, the Iranian side also offered to export more electricity to Pakistan for Gwadar and Chaman and the former agreed to consider that. Pakistan is already importing 104MW of electricity from Iran.

Ali said in his view Pakistan needs more electricity from Iran for Gwadar, of course on a better negotiated tariff. Though China is setting up an imported coal-based 300MW power plant at Gwadar, it may not fulfil the future needs. 

“Once the national grid gets installed at Gwadar, Pakistan can also use more Iranian electricity for its national use,” the minister said.

When the energy minister was asked about the gas project and the issue of $18 billion penalties, he said that both countries have decided to explore ways to implement the project.

The Inter-State Gas Systems of Pakistan and the National Iranian Gas Company signed a revised agreement in September 2019 for the pipeline.

This accord stipulated that Iran would not approach any international court for any delay till 2024 but would be free to do so afterwards. Pakistan could not build the pipeline primarily due to the risk of US sanctions that any project with Iran would invite.

During the talks, the Iranian side was of the view that there could be no US sanctions as it was already exporting gas to Azerbaijan and Turkmenistan, which have not been exposed to any sanctions. The same would hold good for Pakistan in that scenario.

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Irfan Siddiqui meets with the PM and informs him about the Senate performance of the parliamentary party.

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The head of the Senate’s Foreign Affairs Standing Committee and the PML-N’s parliamentary leader paid Prime Minister Muhammad Shehbaz Sharif a visit in Islamabad.

Senator Irfan Siddiqui gave the Prime Minister an update on the Parliamentary Party’s Senate performance.

Additionally, Senator Irfan Siddiqui gave the Prime Minister an update on the Senate Standing Committee on Foreign Affairs’ performance.

He complimented the Prime Minister on his outstanding efforts to bring Pakistan’s economy back on track and meet its economic objectives.

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SIFC Increases Direct Foreign Investment: Investment in the Energy Sector Rises by 120%

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The Special Investment Facilitation Council is intended to help Pakistan’s energy sector attract $585.6 million in direct foreign investment in 2024–2025. The amount invested at the same time previous year was $266.3 million.

This is a notable 120% rise, mostly due to investments in gas exploration, oil, and power. Such expansion indicates heightened investor confidence and emphasizes the development potential in important areas.

The State Bank reports that foreign investment in other vital industries has increased by 48% to $771 million.

This advancement is a blatant testament to SIFC’s efficient investment procedure and quick project execution.

The purpose of the Special Investment Facilitation Council is to establish Pakistan as an investment hub by aggressively promoting regional trade and investment in the energy sector and other critical industries.

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Discos report losses of Rs239 billion.

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When compared to the same period last year, the data indicates that discos have decreased their losses in the first quarter of the current fiscal year.

The distribution businesses recorded losses of Rs239 billion in the first three months of the current fiscal year, a substantial decrease from the Rs308 billion losses sustained during the same period the previous year.

Additionally, the distribution businesses’ rate of recovery has improved. It has increased to 91% in the first quarter of this year from 84% in the same period last year, indicating success in revenue collection.

Regarding circular debt, the Power division observed a notable change. Last year, between July and October, the circular debt grew by Rs301 billion. Nonetheless, this year’s first four months saw a relatively modest increase in circular debt, totaling about Rs11 billion.

These enhancements show promising developments in the electricity sector’s financial health in Pakistan, where initiatives are being made to accelerate recovery rates and slow the expansion of circular debt.

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