Russia Backing Out Of Supporting IP Gas Pipeline Project

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Context

Following the example of a Chinese Exim bank, Russia reportedly has succumbed to pressure from US in ceasing support of Iran-Pakistan gas pipeline project. According to an unnamed Pakistani official, after the talks held in early April, Russia had agreed in principle to support the project technically and financially. However, the official now confirms that no formal reply has been received so far, even after a reminder was sent seeking Russian answer by April 30th.

During the visit of Hina Rabbani Khar to Moscow that took place in February, Russia had offered to pay for the whole project. According to Media reports, Russian had wanted the contract be awarded to the energy giant Gazprom without going through the bidding process.

Meanwhile, Pakistan has remained committed to the project and a joint venture between German firm ILF and Pakistan’s Nespak is working on planning the technical details and completing the survey. That work is expected to be completed in June.

“In the alternative plan, the government is studying a joint investment formula, according to which the engineering, procurement and construction (EPC) contractors will be invited to provide some funds for the pipeline,” a senior Pakistani official has commented.