Pakistan and Iran to jointly develop gas pipeline implementation plan

• Pakistan renewed its commitment to the project: Minister.
• Iran offers to export more electricity for Gwadar, Chaman.
• Both countries decide to explore ways to implement the project.

ISLAMABAD: In a positive development, Pakistan and Iran have decided to jointly develop a Consensus Implementation Plan for the Iran-Pakistan Natural Gas Pipeline (IP), The news reported on Friday.

The decision came after a meeting between the two sides in Tehran, during which Islamabad had sought a relaxation of the February-March 2024 deadline to avoid an $18 billion penalty for not laying a pipeline on its territory.

Iran had asked Pakistan last year to build part of the gas pipeline project on its territory by February-March 2024 or pay a fine of $18 billion.

Negotiations on the plan will begin in the next two to three weeks.

Nevertheless, the Iranian deadline to move international arbitration to September 2024 will remain in the field, allowing so much time to explore bilateral avenues.

said Energy Minister Muhammad Ali The news“We have held constructive talks in Tehran and Pakistan has renewed its commitment to the project.

“We have convinced the neighboring country about our insufficient energy regime for which we have also stepped up work on the TAPI gas pipeline project. The Iranian side listened to us carefully and agreed to increase active commitments to activate the IP project.”

During the talks, the Iranian side also offered to export more electricity to Pakistan for Gwadar and Chaman and the former agreed to consider it. Pakistan already imports 104 MW of electricity from Iran.

Ali said that in his view Pakistan needs more electricity from Iran for Gwadar, of course at a better negotiated tariff. Although China is setting up an imported 300 MW coal-based power plant in Gwadar, it may not meet future needs.

“Once the national grid is installed in Gwadar, Pakistan can also use more Iranian electricity for its national use,” the minister said.

When the energy minister was asked about the natural gas project and the $18 billion sanctions issue, he said that both countries have decided to explore ways to implement the project.

Pakistan Interstate Gas Systems and the National Iranian Natural Gas Company signed a revised agreement in September 2019 for the pipeline.

This agreement stipulated that Iran would not go to any international court for any delay until 2024, but would be free to do so thereafter. Pakistan could not build the pipeline mainly because of the risk of US sanctions that any project with Iran would pose.

During the talks, the Iranian side was of the opinion that there could be no sanctions from the US, as it already exported gas to Azerbaijan and Turkmenistan, which have not been exposed to sanctions. The same would be good for Pakistan in this scenario.