Pakistan minister says Iran gas pipeline project still on

ISLAMABAD Fri Nov 8, 2013 4:24am EST

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ISLAMABAD (Reuters) - Pakistan is committed to building a multi-billion-dollar gas pipeline from neighboring Iran, but the threat of international sanctions makes the task difficult, the South Asian nation's petroleum minister said on Friday.

"There are contractual obligations between Pakistan and Iran," Petroleum Minister Shahid Khaqan Abbasi told Reuters.

Dubbed the "peace pipeline", the $7.5 billion project has faced repeated delays since it was conceived in the 1990s to connect Iran's giant South Pars gas field to Pakistan and India.

Iran has already spent hundreds of millions of dollars and nearly completed the 900-km (560 mile) pipeline to the Pakistan border.

Pakistan, although suffering from severe gas shortages, has made little progress on its part of the line for lack of funds and warnings it could be in violation of U.S. sanctions on Iran.

"There are constraints with the construction of the pipeline," the minister added. "There is a threat of sanctions, either U.S. or U.N. and probably EU also. That limits what options we have with the construction of the pipeline."

He said, "We are really hopeful that construction should start soon, as soon as these issues are resolved."

(Reporting by Maria Golovnina)

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