ISLAMABAD - Pakistan has finalised a contract with China on laying a gas pipeline from Gwadar Port to Nawabshah, the final destination of the protracted Iran-Pakistan gas pipeline.

“The pipeline has the capacity to transfer Iranian gas to Pakistan and is basically a part of the large plan of Iran-Pakistan gas pipeline,” Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi was quoted as saying by an Iranian news agency in an exclusive interview. 

The minister added that an unnamed Chinese company is due to commence operations on the prospective pipeline in about two months and complete the project by the end of 2017.

Abbasi noted that following the completion of the pipeline, which has a length of 700 km, only an 80-km distance between Gwadar Port and Iranian border will remain to be implemented.

Ruling out media speculations on Pakistan’s lack of interest in the IP pipeline, the minister said these speculations are “completely baseless”, adding that the contract with the Chinese contractor will ensure 90 percent of the pipeline's construction.

“In addition, talks with Iranian firms on the issue are also underway,” he said.

Pointing to the two countries’ 20th joint economic commission meeting in Tehran in the near future, Abbasi stressed that the IP pipeline will “definitely” be discussed in the meeting.

“As per the contract, which has been signed with Iran, Pakistan is firm about completing the IP pipeline, and the contract is still valid,” he said.

Asked about one of the clauses of the contract, based on which any sides can fine the other side that causes delays in fulfilling commitments, Abbasi claimed Iran had so far not asked Pakistan to pay any penalties.

According to the clause, Iran can charge penalties on a daily basis against Pakistan for delays it has made in implementing the project, but the Persian Gulf country has not requested for that, as the two countries enjoy friendly relationships.

“In spite of the existing problems in the implementation of IP gas pipeline caused by sanctions, Pakistan is taking steps forward. However, these issues must be resolved,” Abbasi said.