Despite Washington’s clear opposition to the Iran-Pakistan (IP) gas pipeline, top authorities from Tehran and Islamabad are set to finalise a strategy for constructing the initial 80-kilometre pipeline from Gwadar to the Iranian border in the first phase, a small segment of the larger 781-kilometre gas line. This crucial step will take place during the highly anticipated visit of Iranian President Ebrahim Raisi, scheduled to occur after April 20, with tentative dates set for April 22-24.
“The Iranian president may visit after April 20, with tentative dates set for April 22-24. However, diplomats from both countries are in contact to finalise the visit date and agenda for discussions on various crucial issues, including IP gas line, barter trade, counter-terrorism efforts, electricity imports and other matters,” senior officials told The News.
“We have no choice but to lay down the 80-kilometre pipeline from Gwadar to the point where Iran has already laid its portion of the pipeline from the gas field to avoid the $18 billion penalty. If Pakistan manages to extend its contract (gas sales purchase agreement) for importing gas from the Pars gas field in Iran but fails to implement the project, the penalty amount could escalate to $26 billion from the current $18 billion.” The Gas Sales Purchase Agreement (GSPA) was signed under French law, and the Paris-based Arbitration Court will decide disputes between the two countries. The French arbitration court does not recognise the US sanctions. Iran has extended the deadline for the much-delayed IP gas line project by 180 days until September 2024. It has threatened to move the Paris-based International Arbitration if Islamabad does not respond positively, seeking a penalty of $18 billion.
On February 23, the Cabinet Committee on Energy (CCoE) approved the recommendations of the Ministerial Oversight Committee for the IP Project, a significant milestone in the project’s progress. The committee, which was established by the prime minister in September 2023, had recommended commencing work on the 80-kilometre segment of the pipeline inside Pakistan, from the Pakistan-Iran border to Gwadar, in the first phase. The project, which will be executed by Interstate Gas Systems (Pvt) Ltd., has received funding through the Gas Infrastructure Development Cess. All relevant divisions have given their approval to proceed with the project, a crucial step to ensure gas supplies to the people.
