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US Sanctions Delays Pak-Iran Multibillion Dollar Gas Pipeline Project

Pakistan has postponed the multi-billion dollar Iran gas pipeline project aiming to supply 750 million cubic feet of gas daily due to US sanctions. Tehran claims project completion from its side while Pakistan cites US sanctions delay. 

Aug 7, 2023

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Pakistan has postponed the multi-billion dollar gas pipeline project to source affordable gas from Iran. According to a report, Islamabad took this step to the United States enforcing several sanctions against Tehran over its nuclear programme. The event coincides with Pakistan’s efforts to stabilize its financially strained economy, aided by the International Monetary Fund of USD 3 billion in loans. The project was started as an India-Pakistan-Iran gas pipeline but it became a bilateral project between Pakistan and Iran after India decided to leave the project. According to Minister of State for Petroleum Mr. Musadik Malik, “Pakistan has issued a Force Majeure and Excusing Event notice to Iran under the Gas Sales and Purchase Agreement (GSPA), which resultantly suspends Pakistan’s obligations under the GSPA.” 

Also Read: Oil Ministry Shares Ongoing Construction of Multiple Natural Gas Pipelines of 12,206 Km Length

Recently, Iranian Foreign Minister Mr. Hossein Amir Abdollahian, during his three-day visit to Pakistan, drew attention to the need for the completion of the project which serves the national interest of the two countries. Tehran, the capital city of Iran, has claimed to have completed its then-estimated cost of USD 7.5 billion project of the 1,150-kilometer pipeline for which a groundbreaking ceremony was jointly conducted by then-presidents Asif Ali Zardari and Mahmoud Ahmadinejad on the Iranian site of Gabd, near Chabahar in March 2013. Pakistan promised to finish its side of the project by January 2015 but the project has been delayed due to sanctions by the US. Mr. Musadik Malik reports, “The Government of Pakistan is engaged with the US authorities, through diplomatic channels, to seek exemption for the project. All necessary actions are being taken to construct the gas pipeline at the earliest.” The main objective of the pipeline project was to supply 750 million cubic feet per day of gas.

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