The National Bank of Pakistan (NBP) and Oil and Gas Development Company Limited (OGDCL) have refused to become a part of Iran-Pakistan Gas Pipeline Project due to looming fear that United Nations (UN) may impose economic sanctions on Iran. "At this point with reference to earlier decision of the SC on equity commitments by Public Service Enterprises (PSEs) in the project, the chairman (Petroleum Minister) enquired views of PSEs (NBP, OGDCL, PARCO, EOBI, PPL) on the status.
NBP and OGDCL replied that in view of their international presence (NBP international operations and OGDCL listing on international stock exchange) and sanctions on Iran (UN, US and EU), they have concern that the equity participation in the project might hurt their other operations", official documents available with Business Recorder reveal.
Following the refusal of NBP and OGDCL the SC picked Industrial and Commercial Bank of China (ICBC), Habib Bank Limited (HBL) and Ernest Young Ford Rhodes Sidaat Hyder (EYFRS) as Financial Advisor (FA) of the gas pipeline project. Pakistan will import 750 million cubic feet of gas daily for 25 years from Iran, according to the terms of the agreement. The pipeline will facilitate transfer of natural gas from Iran's biggest gas field in South Pars to Pakistan through the south-western Balochistan province.
Pakistan currently is facing severe gas and power shortage, while the government is managing the crises through gas and power load management plans as well as increasing the price of the utilities. Currently government has declared two-and-a-half-day per week suspension in supply of Compressed Natural Gas (CNG) in Punjab and two days in Sindh.
The US publicly opposes the Iran gas pipeline, which, according to analysts, had been one of the main reasons for the project's delay. Experts and government officials insist early completion of the crucial project would effectively deal with the existing energy shortage. The project would help generate around 7,500 megawatts of electricity, which is equivalent to peak load-shedding in Pakistan, according to experts.