ISLAMABAD: Senior government officials have told The News that Iran has extended a 180-day deadline to September 2024 for Pakistan to show seriousness on the much-delayed Iran-Pakistan (IP) gas line project. If Pakistan does not give a positive response, Iran will file a claim of 18 billion dollars against Pakistan in the Paris-based international arbitration forum.
However, Iran has also offered to provide its technical and legal expertise to Pakistan in order to adopt a win-win strategy for both sides and avoid taking the matter to international arbitration, as well as imposing Pakistan on Iran. The effects of US sanctions can also be avoided.
A team providing technical and legal expertise from Iran was scheduled to visit Pakistan from January 21 to 24 to find a middle ground for the implementation of the IP gas line project, but the tension between the two countries has been postponed. Due to this the team could not come.
Due to the violation of border and international laws, the diplomatic relations between the two countries were severed for a short time, but now these relations have been restored and normalized.
According to officials, an Iranian team consisting of experts in international law, legal framework, and gas engineers will come to Pakistan in the second week of February to hold bilateral talks. Will prepare practicals.
The Iran-Pakistan gas line project has been delayed since 2014. Pakistan received the latest notice 25 days ago.
Will the Iran-Pakistan Gas Pipeline ever work or will it prove to be the Nord Stream 2 of this region?
Pakistan has refused to continue work on the Pak-Iran gas pipeline project
Earlier, Iran sent a second notice to Pakistan in December 2022 asking Pakistan to construct part of the gas pipeline project on its side by February or March 2024 or else be ready to pay 18 billion dollars in damages.
Earlier, the first notice was sent in 2019 that Iran would approach the International Court of Arbitration for Pakistan’s failure to construct a part of the gas pipeline on its territory as per the agreement, and for this purpose, Iran had signed the Gas Sales Purchase Agreement. (GSPA) had threatened to impose penalty provisions.
GSPA was signed in 2009 for 25 years. Pakistan has been arguing that due to US sanctions on Iran, Pakistan could not work on this project on its soil. However, Iranian officials do not accept this argument and call the US sanctions unjustified. Iraq and Turkey have long bought gas from Iran because they have taken advantage of exemptions from US sanctions. Similarly, India also has exemptions on import of petroleum products for its economy.
In the meantime, Pakistan tried several times to know from the US officials whether the US sanctions on Iran will have any effect on Pakistan for being a part of the gas pipeline project, however, the US did not respond. The GSPA was signed under French law and the Paris-based Court of Arbitration is the forum for settling disputes between the two countries.
The French arbitration court does not recognize the US sanctions. Senior Pakistani government officials have drawn up a strategy to be discussed with Iranian experts to partially start work on the 81-km IP gas line project from Gwadar to a point on the Iranian border. It has been decided that Iran has already laid a gas pipeline. This will help Pakistan avoid an expected penalty of $18 billion.
According to the project, the officials said that the 81 km long pipeline will connect Gwadar to the IP gas line project and the gas will be used in Gwadar.
Initially, if the US does not impose any sanctions, the pipeline will be expanded from Gwadar to Nawabshah. In case of sanctions imposed by the US, Pakistan will get a good reason to abandon the project and thus Pakistan will avoid damages in the International Court of Justice.
The high-level leadership of Pakistan and Iran are in constant communication on this matter, while Pakistan’s Special Investment Facilitation Council (SIFC) has also been briefed on the project details, including Iran’s latest notice on the matter. .
Senior officials of SIFC say that Pakistan has to show seriousness on the matter of laying the pipeline or else it will face fines.
Sources say that Inter State Gas System (ISGS) has funds available for laying 81 km long pipeline.
The Ministry of Finance has three and a half billion rupees (1.2 billion dollars) collected under GIDC (Gas Infrastructure Development Cess). This amount to the pipeline Nawab Sh
