Pakistan Iran gas pipeline project face a setback

Pakistan Iran gas pipeline project face a setback

ISLAMABAD - Pakistan has extended an invitation to Iran for holding crucial talks on Iran-Pakistan gas pipeline project.

“Yes, we have invited authorities concerned in Tehran to come to Islamabad in the current month of May, and hold talks on [the] IP gas line project,” a senior official at Petroleum Division (Energy Ministry) has informed media.

“The petroleum division has invited the Iranian authorities on the orders of the Prime Minister Shahid Khaqan Abbasi.”

Both sides would put their heads together to find out the way out how to proceed for implementation of the project in the presence of the US sanctions and hawkish attitude of the Trump administration.

Pakistan and Iran have already agreed to open up and review the gas sales purchase agreement (GSPA) inked between the two in 2009 following the reduction in the prices at which Pakistan is procuring the LNG from Qatar and is having the imported product through spot purchasing and the price of gas settled under TAPI gas line.

Pakistan and Iran signed GSPA in 2009 under IP gas pipeline project in era of Pakistan People’s Party.

Since then the project could not get the shape. Tehran had already indicated to authorities concerned in Islamabad saying it has made up its mind to move arbitration against Pakistan for unilaterally shelving the project.

To avoid the US sanctions, the official said, earlier Petroleum Ministry headed by Federal Minister Shahid Khaqan Abbasi who is now the Premier of Pakistan had carved out the plan under which LNG pipeline was planned to be laid down from Gwadar to Nawabshah. Two LNG terminals were also planned at Gwadar Port and to this effect a Chinese company had been awarded the contract and the said Chinese company had also arranged the financial supply chain for completing the project.

Iran was told that whenever the sanctions are to be erased, then the pipeline will be extended to Iranian border from Gwadar and then it will be called as IP gas line. However Donald Trump's decision to quit Iran Nuclear deal may put the IP project under sanctions from US and make it difficult project for Pakistan.