ISLAMABAD, Feb 26: President Asif Ali Zardari will visit Tehran on Wednesday to finalise a loan agreement for the multi-billion-dollar Iran-Pakistan gas pipeline project.

“President Zardari will undertake a two-day official visit to Iran on Wednesday (today),” the president’s spokesman said on Tuesday.

Pakistan and Iran have been negotiating a loan arrangement under which the latter will provide $500 million to the former for laying gas pipeline on the Pakistani side.

A team of Pakistani negotiators is already in Iran for discussions on the deal. They had accompanied Iranian Oil Minister Rostam Qassemi on his return to Tehran after visiting Pakistan last week.

The Presidency’s statement did not mention if President Zardari would witness the signing of the loan deal. However, it reminded: “The president has been urging early completion of mega projects between the two countries and expressed the hope that the visit will lend further impetus to efforts aimed at early completion of the bilateral projects.”

According to reliable sources, the agreement will be placed before the federal cabinet next week for approval.

The two sides are also planning to hold a ground-breaking ceremony of the project on Monday (March 4) along the Pakistan-Iran border. The two presidents are likely to attend.

According to a source, the laying of Pakistan section of the gas pipeline will be completed in 22 months.

Pakistan appears to have ignored the US pressure while moving ahead with the gas pipeline project. The US has time and again warned Pakistan against pursuing the project.

“We’ve made clear to countries around the world, including Pakistan, that we believe that it’s in their interest to avoid activities that could be prohibited by UN sanctions or that could be sanctionable under the US law,” State Department spokesperson Victoria Nuland said recently.

“The visit is a manifestation of the great importance Pakistan attaches to its relations with Iran,” the presidential spokesman noted.

Reiterating Pakistan’s commitment to the project, Foreign Office spokesman Moazzam Khan said: “The Iran-Pakistan gas pipeline project is enormously important for Pakistan as we are an energy-deficient country. It is in our national interest to have this project. We are committed to have this project. Yes, there are some issues, but Pakistan is determined to pursue this project.”

The $1.2-1.5 billion pipeline project will enable export of 21.5 million cubic metres of natural gas daily from Iran to Pakistan. Almost 900km of pipeline in Iranian territory has already been laid.

The two countries are also discussing the setting up of an oil refinery in Pakistan and the opening of another trade route.