Pakistan and Iran have signed the long-awaited gas pipeline project agreement, Pakistani officials said Wednesday.
An official from Pakistan's Ministry of Petroleum and Natural Resources confirmed to Xinhua that Pakistan and Iran have signed the heads of agreement and an operational accord in Istanbul on Tuesday.
The inter-state gas systems, a semi-autonomous body which will take care of Pakistan's interests in the import of gas through the pipeline, and the National Iranian Oil Company finalized the agreements, said G.A. Sabri, Special Secretary to the Minister of Petroleum.
The two technical agreements specify the dimensions of the pipeline, including its diameter, number of compressors and other operational issues.
The agreements are part of the "conditions precedents" to be finalized to make the sale-purchase agreement effective.
"It is a jubilant time for Pakistan. This agreement will help us to get rid of energy crisis," said Sabri.
Expressing the hope that physical work would start soon enabling the gas into the system by the timeline, Pakistani Minister of Petroleum Naveed Qamar termed the signing a historic achievement and a milestone towards meeting the energy needs of the country.
Pakistani industry is suffering due to energy shortage as the gap between energy supply and demand is increasing day by day. According to official figures the shortfall has crossed 3,000 megawatt.
Under the deal, 750 million cubic feet of gas will be pumped to Pakistan daily from Iran by mid-2015.
It was also decided in the heads of agreement deal that India will also be able to get the gas volume through the Pakistani territory if and when India decides to join the project. Pakistan will have the right to charge the transit fee in return of the safe transit of Indian volume.
The project was decided between Pakistan and Iran in 2007 and later extended to Pakistan's neighbor and old rival India. But India has been reluctant to finalize the deal due to pressure from the United States. In 2008, U.S. signed a nuclear civil technology agreement with India to fulfill its energy demand.