TEHRAN - Pakistan risks a fine of $18 billion for not completing the Iran-Pakistan gas pipeline project (known as the IP pipeline) in the timeframe stipulated in the agreement, according to a member of the National Assembly of Pakistan.

“Iran could hand Pakistan a whopping $18 billion penalty if Islamabad fails to complete a portion of the IP gas pipeline project on its territory by February-March 2024,” Noor Alam Khan said.

The ministry official said the IP gas pipeline project has also sought permission from the U.S. as well. “A written request is being sent through the Ministry of External Affairs,” he said, adding that if we do not lay the gas pipeline, Iran will impose more penalties.

Near 20 years after the initiation of talks over the peace gas pipeline, beginning as the Iran-Pakistan-India gas pipeline project, and despite the fact that Iran has completed its part of the pipeline in its territory, Pakistan has fallen behind the target to take delivery of gas, initially scheduled for 2014.

The pipeline will allow Pakistan to start receiving 750 million cubic feet of gas from Iran daily once the pipeline is completed and commissioned. In February 2019, Tehran notified Islamabad of its intention to move forward with arbitration court proceedings for not constructing the pipeline in Pakistan’s territory within the specified time frame under the IP gas line project and invoked the penalty clause of the Gas Sales Purchase Agreement (GSPA).

In September 2019, Pakistan’s Inter-State Gas Systems (ISGS) and the National Iranian Gas Company (NIGC) signed a revised agreement for the pipeline’s construction, which stipulates that neither Iran nor Pakistan will take the other to court for delays or impose fines until 2024.

EF/