Iran's Rouhani Says Can Provide Pakistan Gas Through Pipeline Within Months

ISLAMABAD, March 26 (Reuters) - Iranian President Hassan Rouhani said on Saturday that Iran had completed work on its side of a much-delayed pipeline pumping natural gas to Pakistan and would be in a position to provide gas to its energy-starved neighbour in a few months.

Rouhani spoke at a news conference while in Pakistan for two days of talks focused on increasing Pakistan's electricity imports from Iran, boosting trade relations and reviving plans for a pipeline between the two countries.

"Iran has constructed this gas pipeline up to the border of Pakistan and we are ready to deliver the gas to Pakistan at our borders. We have almost completed our share," Rouhani said. "It is now up to Pakistan to initiate work on its side."

Dubbed the "peace pipeline", the $7 billion gas project has faced repeated delays since it was conceived in the 1990s to connect Iran's giant South Pars gas field to India via Pakistan.

India quit the project in 2009, citing costs and security issues, a year after it signed a nuclear deal with Washington.

The United States had opposed Pakistani and Indian involvement, saying the project could violate sanctions imposed on Iran over its nuclear activities.

Most of the sanctions were lifted in January in return for Iran complying with a deal to curb its nuclear ambitions.

Boosting Trade

At Saturday's news conference, the Iranian president said Iran was also interested in connectivity between Pakistan's southern port of Gawadar and the Chabahar port in southeast Iran through roads and shipping lines.

He said Iran was already selling 1,000 MW of electricity to Pakistan and would increase this up to 3,000 MW.

Speaking at a business conference with Rouhani earlier in the day, Pakistani Prime Minister Nawaz Sharif said Pakistan and Iran had signed an agreement to increase annual trade volumes between the two countries to $5 billion by 2021.

On Friday, the Pakistani premier said Pakistan would open two new crossing points on its border with Iran, helping to encourage trade hampered by years of Western sanctions against Tehran.

Trade between Pakistan and Iran fell to $432 million in 2010-11 from $1.32 billion in 2008-09, according to the Trade Development Authority of Pakistan.

Energy-starved Pakistan suffers about 12 hours of power cuts per day and is keen to import Iranian oil, gas, iron and steel.

Iran is interested in Pakistani textiles, surgical goods, sports goods and agricultural products.

Pakistan also plans to set up industrial sites in the impoverished border area, especially for petrochemicals storage, and link the infrastructure to a $46 billion project with China dubbed the China-Pakistan Economic Corridor.

(Writing by Mehreen Zahra-Malik; Editing by Digby Lidstone)