TEHRAN, Iran (AP) Iran has canceled a planned $500 million loan to Pakistan to build part of a pipeline to bring natural gas from the Islamic Republic.
Deputy Oil Minister Ali Majedi said Iran has no obligation to finance the Pakistani side of the project and also doesn't have the money.
Iran has already invested over $2 billion to construct the Iranian side of the pipeline. But there are serious doubts about how Pakistan could finance the $2 billion needed to construct the pipeline on its territory. Iran's former president Mahmoud Ahmadinejad had pledged the loan.
Pakistan has welcomed an Iranian offer to approach third parties, including European companies, to finance the project.
"Pakistani officials were told in recent talks that, given the sanctions, Iran is not able to finance construction of the pipeline (in Pakistan) and has no obligation to do so," he said. His comments were posted on the oil ministry's website, shana.ir, Saturday.