Gas Pipeline
ISLAMABAD: In a significant development, Pakistan and Iran have achieved a crucial agreement to actively collaborate on the development of a consensus implementation plan for the Iran-Pakistan (IP) gas pipeline. The commencement of negotiations in this regard is expected within the next two to three weeks.
Despite this positive stride, the Iranian deadline to pursue international arbitration by September 2024 remains in effect, allowing a window of time for bilateral exploration.
Energy Minister Muhammad Ali conveyed that constructive discussions took place in Tehran, emphasizing Pakistan’s renewed commitment to the project. The neighboring country acknowledged Pakistan’s energy challenges, leading to an increased focus on active engagements to facilitate the IP project.
During the discussions, Iran also proposed exporting additional electricity to Pakistan for Gwadar and Chaman, a proposition Pakistan is open to considering. Currently importing 104 MW of electricity from Iran, Pakistan sees potential for increased electricity imports for Gwadar, particularly after the installation of the national grid. Minister Ali stressed the need for a well-negotiated tariff for such arrangements.
Addressing concerns about the gas project and potential penalties amounting to $18 billion, Minister Ali mentioned that both nations are dedicated to exploring viable avenues for project implementation.
In September 2019, the Inter-State Gas Systems of Pakistan and the National Iranian Gas Company signed a revised agreement for the pipeline. This agreement stipulated that Iran refrains from approaching international courts for any delays until 2024, after which it retains the option to do so.
Despite previous challenges stemming from the risk of US sanctions, Iran argued during talks that similar gas exports to Azerbaijan and Turkmenistan faced no sanctions, making a compelling case for proceeding with the IP project in collaboration with Pakistan.
