Pakistan to ask Iran for relaxation on IP gas pipeline project deadline. In a bid to avert an imposing $18 billion penalty, Pakistan is slated to approach Iran on Tuesday seeking an extension beyond the February-March 2024 deadline for completing a crucial segment of the Iran-Pakistan (IP) gas line project.
As reported by The News, last year, Iran stipulated that Pakistan complete the 781-kilometer pipeline from the Iranian border to Nawabshah by the specified deadline or face a hefty penalty.
The delegation from Pakistan, led by Energy Minister Muhammad Ali, is set to engage in discussions with Iranian authorities in Tehran on Tuesday. Their primary objective is to persuade Iran against pursuing international arbitration to enforce the $18 billion penalty.
Additionally, talks will center around Pakistan’s endeavors to navigate U.S. sanctions imposed on Iran due to its nuclear pursuits, particularly in the context of restructuring the IP gas pipeline project.
Also read: Pakistan rethinking to complete Iran gas project avoiding US sanctions
Underlining the delicacy of the situation, the report outlines that Pakistan is treading cautiously, exploring the possibility of implementing the project through a third party. This strategic move aims to mitigate the impact of U.S. sanctions that pose a significant challenge to the direct procurement of gas from Iran.
Despite efforts by the Pakistani government to seek information from relevant U.S. departments regarding the potential repercussions of these sanctions, responses have yet to be received.
The September 2019 agreement between the Inter-State Gas Systems (ISGS) of Pakistan and the National Iranian Gas Company (NIGC) is highlighted, emphasizing the agreement’s provision that Iran refrains from approaching international courts for delays until 2024.
Post this timeframe, Iran retains the option to pursue international arbitration in France, seeking the aforementioned $18 billion penalty.
Crucially, the news article underscores Pakistani officials’ intention to apprise their Iranian counterparts of a proposed restructuring of the IP gas pipeline project.
This new approach contemplates the acquisition of gas through an intermediary, potentially shielding Pakistan from the brunt of direct involvement in U.S.-sanctioned transactions. The report suggests that Iranian authorities are receptive to this alternative.
