ISTANBUL (Commodity Online) : Gas rich Iran on Tuesday signed an agreement with Pakistan on Iran-Pakistan gas pipeline project here.

The two neighbors signed the Heads of Agreement (HoA) and certain Conditions Precedents (CPs) to make the Gas Sales Purchase Agreement (GSPA) effective.

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The Gas Sales Purchase Agreement became effective to kick off the work on the project. The signing of these agreements was required for flow of Iranian gas towards Pakistan.

The agreement was signed in a third country because it is governed by French law, denying any advantage to Iran or Pakistan in case of any dispute.

Under the GSPA, Iran would provide 750 million cubic feet of gas per day to Pakistan for the next 25 years, which would generate 4000MW of electricity.

Government of Pakistan would ensure to provide guarantee of $3-4 billion investment for Iran-Pakistan (IP) gas pipeline project.