The Express Tribune said the two countries would sign an agreement this month under which Iran will lend Pakistan $250 million toward the construction costs. It said a second tranche of another $250 million has been offered by Iran to cover a third of the costs of what is estimated to be a $1.5 billion pipeline.
The pipeline has been discussed and negotiated for more than decade. An agreement was actually signed a few years ago. Iran has almost completed building its part of the pipeline from the South Pars gasfield in the Persian Gulf to the border with Pakistan. But Pakistan has so far done nothing on its side of the border.
There has been talk on-and-off for years about an Iranian loan. It remains to be seen if this latest loan report will materialize. Pakistan will not be able to go ahead with the pipeline work, however, until it can nail down the further billion dollars required.
The Iranian pipeline isn’t a waste if nothing happens. It is already being used to provide gas to communities all across the far south and southeast of Iran. But it has much spare capacity with which to supply Pakistan.
The Islamic Republic longs to be a major natural gas exporter, but, after decades of promotion, its only major client is Turkey. Armenia imports small quantities.