Iran-Pakistan gas pipeline agreement
Iran-Pakistan gas pipeline agreement
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The Inter State Gas Systems (ISGS) of Pakistan and the National Iranian Gas Company (NIGC) have inked a revised agreement for the construction of the gas pipeline between the two countries.

The Inter State Gas Systems (ISGS) of Pakistan and the National Iranian Gas Company (NIGC) have inked a revised agreement for the construction of the gas pipeline between the two countries.

According to sources, under the revised accord, Iran would not approach any international court if there was a delay in the construction of the pipeline and neither would Pakistan pay any fine to Iran.

Both the sides would mutually chalk out a practical solution for the completion of the project. Pakistan would be able to construct its pipeline by 2024 after which it would buy 750 million cubic feet gas from Iran daily.

For more than four years, the IP gas project was off the table due to international sanctions – both multilateral imposed by the United Nations and the unilateral clamped by the United States, Canada, United Kingdom and the European Union.

The unilateral sanctions imposed by the US were the most severe amongst all international restrictions – Iran Sanctions Act 1996, Comprehensive Iran Sanctions, Accountability and Divestment Act 2010 and National Defence Authorisation Act-2012.

The construction work on the Pakistani section of the pipeline had been inaugurated in March 2013 and it was planned to be completed within 22 months.

The IP gas pipeline, also known as the Peace pipeline, is an under-construction 2,775 kilometres pipeline to deliver natural gas from Iran to Pakistan.

The pipeline would be supplied from the South Pars field. It starts from Asalouyeh and stretches 1,172km through Iran.
The Iranian section is known as Iran’s seventh cross-country gas pipeline.

The first 902km part of this section runs from Asalouyeh to Iranshahr. The second 270km part runs from Iranshahr to the Pakistan- Iran border.

However, the previous Pakistan Muslim League-Nawaz (PML-N) government had shelved the project. During the PPP Government under Asif Ali Zardari and Syed Yusuf Raza Gilani was bold and nationalist in the Pakistan context and they took decision to buy Iranian gas for which agreements were signed. The PPP Government ignored the negative reaction from Saudi Arabia and also from the United States and concluded the agreements in the interest of Pakistan and its people. The Iranians, on their part, were generous too and they offered expertise and credit facility to build the Pakistan section of Iran Gas Pipeline—from Gabd to Nawabshah.

Iranians are of the opinion that Pakistan Government was afraid of the Saudi and American reaction if Pakistan buys gas and electricity from Iran or make any effort to boost the Iranian economy. The Iranian Government also offered a credit facility of 500 million US dollars to build the Pakistan section of gas pipeline. Iran was confident that Pakistan Government would not come under pressure from Saudi Arabia, its ally, and the United States and constructed the gas pipeline from the main source of the gas to Bandar Abbas, Iranshahr, a township in the heart of Iranian Balochistan, and Pakistani border point near Gabd.

It is a fact that Pakistan had no other workable option but to depend on the Iran gas pipeline project to meet its growing energy needs. On the other hand, the US is determined not to permit Iran and its partners to complete the gas pipeline under the present security climate in the region and the US will continue to mount pressure on all concerned, including on the Government of Pakistan, to shelve the project unless Iran surrenders to US dictates. Our newly developing energy cooperation with Iran is much more important for Pakistan than the contentment of the US with our policy choices.