The Senate Standing Committee on Cabinet Secretariat has called upon theMinistry of Foreign Affairs and the Attorney General for Pakistan (AGP) toprovide information on the reported objections raised by the United Statesregarding the multi-billion-dollar Iran-Pakistan (IP) gas pipeline project.
Tehran has claimed to have finished its part of the 1,150-kilometerpipeline, with the groundbreaking ceremony conducted jointly by formerPresidents Asif Ali Zardari and Dr. Mahmoud Ahmadinejad in Gabd, nearChahbahar, Iran, in March 2013, with an estimated cost of $7.5 billion atthe time. Pakistan had committed to completing its side of the project byJanuary 2015.
However, in February 2014, then-Petroleum Minister Shahid Khaqan Abbasiinformed the parliament that the Iran-Pakistan project was halted due tointernational sanctions.
Earlier this year, former Petroleum Minister Musadik Malik explained thatdespite Pakistan’s commitment to its contractual obligations under the GasSales and Purchase Agreement (GSPA), the project couldn’t commence due toUS sanctions on Iran. Officials stated that Pakistan had sought a solutionfrom the United States earlier this year to address energy shortagesrelated to the project but had not received a response.
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In August, Pakistan issued a ‘Force Majeure and Excusing Event’ notice toIran, indicating its inability to pursue the project while US sanctions onIran were in place unless Washington allowed it. During the Senate paneldiscussion, Petroleum Additional Secretary Hassan Yousafzai informed thecommittee that Iran had set a 2024 deadline for pipeline completion, andfailure to meet it could result in fines.
Efforts are underway to renegotiate the matter with Iran and explorealternative gas sources. The secretary expressed concerns about potentialliabilities of up to $20 billion, including discussions with the US, andmentioned that laying the pipeline to Gwadar would cost $2 billion, with apotential $18 billion penalty if the deal with Iran was abandoned.
