Iran, Pakistan hope to close gas pipeline deal by month-end

Iran and Pakistan on Thursday finalised the 'heads of agreement' on the gas supply pipeline from Iran and is expected to sign a formal agreement on the project by the end of this month, Pakistan newspapers reported citing senior official at the petroleum ministry.

The agreement was finalised a few days ahead of the 15 February deadline, reports said.

Under the agreement, both parties said they have fulfilled all the condition precedents (CPs).

Pakistan has finalised framework with Iran on the performance guarantee (PG) that Islamabad would extend and has also submitted the comfort letter to Iran, the reports said.

Pakistan petroleum minister Naveed Qamar declined to give any detail of the agreement, but said both countries would formally sign the deal before 8 March.

He was speaking to media persons after the inauguration ceremony of a gas processing plant in Sanghar.

"Under the comfort letter, the government of Pakistan would allow the third country to import gas through IP line. In case any country in future comes to join the project, but the permission will be subject to the gas tariff and transit fee to be worked out as per best practices of that time."
"The Gas Sales Purchase Agreement (GSPA) would be effective from the day when both the countries formally sign the heads of agreement by end of the ongoing month," the minister said.

While China is reported to have offered to replace India in the project, Iran seems to be still expecting India to join.