Pakistan eyes Russian funding for Iran gas pipeline

(hydrocarbonprocessing) -- Pakistan said Thursday it would seek Russian funding for a multi-billion dollar gas pipeline from Iran amid Chinese reluctance to invest in the project over fears it could be hit by sanctions.

The quest for alternative sources of funds began when the Industrial and Commercial Bank of China failed to sign up to a consortium to finance Pakistan's USD1.5 billion share of the project.

"Pakistan's technical delegation will visit Moscow early next month to have discussions on this subject," said foreign ministry spokesman Abdul Basit.

The Pakistan team will hold talks with relevant officials and different companies, including Russian gas giant Gazprom, Basit said.

A petroleum ministry official confirmed that Russia was a possible source of funding, given that there has still been no formal response from ICBC.

The United States wants Islamabad to abandon the project because of sanctions against Iran over its controversial nuclear program, but Pakistan has insisted it is vital in helping to overcome a debilitating energy crisis.

Pakistan and Iran signed a deal in 2010 in which Tehran would supply natural gas to its eastern neighbor from 2014, with sales to reach 750 million cubic feet (21 million cubic meters) to one billion cubic feet per day by mid-2015.

Pakistan, which produces just 80% of its own electricity needs, has presented the USD7.5 billion gas project as a partial answer to the energy crisis, which has led to blackouts and has suffocated industry.