China to finance Peace Pipeline

China plans to build a pipeline to transport natural gas from Iran to Pakistan.

A deal is likely to be signed during the Chinese President’s visit to Islamabad this month, Pakistani officials have said.

Pakistan has been negotiating for months for China to build the Pakistani portion of the pipeline, which will cost up to US$2 billion.

Dubbed the ‘Peace Pipeline’, its 900 km section from an Iranian gas field is complete and Pakistan is under pressure to complete its part of the scheme.Pakistan hasn’t begun construction in light of threatened US sanctions for trading with Iran.

China will reportedly finance the so-called ‘Peace Pipeline’ natural gas pipeline from Iran.

The final deal is to be signed during the long-sought visit of Chinese President Xi Jinping to Islamabad in April, according to reports.

First proposed over 20 years ago, the 1045 mile (1682 km) pipeline will transfer gas from Iran’s south to the Pakistani cities of Gwadar and Nawabshah. Karachi, the country’s biggest city of 27.3 million, will also be connected via local energy distribution systems already in place.

Iran has said the 560 mile portion that runs to the Pakistan border is already complete, which only leaves US$2 billion needed to build the Pakistani stretch.The project could cost up to US$2 billion if an LNG port is constructed at Gwadar. Otherwise, the project to complete the Pakistani pipeline will cost between US$1.5 billion – US$1.8 billion. Pakistan is in negotiations with China Petroleum Pipeline Bureau, a subsidiary of Chinese energy major China National Petroleum Corporation, to finance 85% of the project. Pakistan will pay the rest.

Edited from various sources by Elizabeth Corner

Sources: GNN LiberiaRT

Published on 13/04/2015

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