The political transition in Pakistan's capital, Islamabad, is likely to delay a $1.8 billion natural gas pipeline project between Iran and Pakistan beyond the year-end 2014 deadline and further aggravate Pakistan's energy crisis, according to Pakistani officials.
Petroleum Secretary Abid Saeed and other officials said that important approvals for beginning construction of the pipeline could not be obtained from the interim government during a briefing of the Standing Committee on Petroleum of the upper house of Parliament on Thursday, as reported by India's First Post.
"The Petroleum Ministry needs to get approval from the next government," said Saeed. According to the energy executive, Pakistan's government needs to issue a sovereign guarantee to engineering and construction contractor Tadbir Energy of Iran, yet this has been delayed till the new elected government takes over.
The gas pipeline project, which will transport 750 million cubic feet of natural gas per day to Pakistan for 25 years, was initiated by the previous administration, the Pakistan People's Party, despite considerable opposition from the United States. The PML-N, which won the May 11 election, is expected to form a government in the first week of June, after which action may be taken on the pipeline project.
The cost of the project was initially estimated at $1. 5 billion, according to the officials, but that figure has since been revised to $1.8 billion due to cost escalation and currency devaluation.