Iran's NIGC Still Hopeful of Gas Deal With Pakistan

EghtesadOnline: The National Iranian Gas Company does not intend to file a lawsuit against Pakistan in the International Court of Arbitration for not completing the Iran-Pakistan (IP) Pipeline on its territory, the head of the company said.

News ID: ۷۴۸۳۶۱

04 September 2019

"Penalizing Islamabad in not on the agenda. We believe in constructive interaction and are waiting for Pakistan [to fulfill its part of the deal] complete the pipeline," Hassan Montazer-Torbati was quoted as saying by ILNA on Monday.

Expressing hope that the pipeline can be completed soon, he said NIGC is ready to supply the energy-hungry neighbor with the much-needed gas whenever the infrastructure is in place, according to Financial Tribune.

"There will be no limitation in selling gas to the neighboring country and as soon as they announce, the contract [signed in 2013] will come into effect.”

Iran and Pakistan signed a $1.5 billion natural gas pipeline deal in 2013. The accord stipulates that Pakistan would be fined up to $3 million a day if it fails to complete its share of the pipeline by January 2015.

Iranian officials said in 2016 that 1,400 kilometers of the pipeline on the Iranian side of the border was in place. Cash-strapped Islamabad said it is struggling to raise money to lay 781km of the pipeline on its territory from the Iranian border to Gwadar and on to Nawabshah.

The so-called Peace Pipeline would bring gas to Pakistan, which suffers from a crippling electricity deficit because of a shortage of fuel for power plants.

"Tehran is unwilling to revoke the pipeline contract with Islamabad," the NIGC chief said. Doing so could irk Pakistan and push it to relinquish the project, he implied.

Pakistani officials have often said they are forced to delay the project due to the US sanctions against Iran.

According to Pakistani news outlets, Islamabad and Tehran are expected to extend the IP gas line GSPA (gas sales purchase agreement) for five years till August  2024 through a mutually agreed amendment.

Iranian energy officials have not commented on the issue yet.

Under earlier GSPA, Pakistan was to have a first gas inflow from Iran under the IP gas line from January 1, 2015 after implementing the gas project by December  2014.

According to a copy of the draft agreement seen by news outlets, French legal counsel Gide Loyrette Nouel (GIDE) and attorney general of the Pakistan Law Ministry played pivotal role in finalizing the draft for amendment of the IP-GSPA.