Pakistan approves construction of Iran-Pakistan gas pipeline amid fear of penalty |

Feb24,2024



New Delhi: The Pakistan the government has given Approval For Construction Work on its section of the Iran-Pakistan (IP) gas pipeline.
The approval for the initial phase of the 80 km section within Pakistan was given by the interim government's Cabinet Committee on Energy (CCOE), days before the new government took charge after the February 8 elections.
“The Government of Pakistan has approved the commencement of construction work on its section of the Iran-Pakistan (IP) gas pipeline,” an official statement said.
The project is expected to start from the Pakistan-Iran border and extend to the port city of Gwadar in Balochistan province in the first phase.
“All concerned divisions gave positive approval to proceed with the project to ensure gas supply to the people of Pakistan, thereby meeting the growing energy needs of the country,” the statement said.
Pakistan's Interstate Gas Systems (Private) Limited will be responsible for executing the project, which will be funded through the Gas Infrastructure Development Cess (GIDC).
According to multiple reports, Pakistan has been forced to start the work due to the fear of a possible US$18 billion fine for failing to complete the project on time.
Iran has given an extension of 180 days till September 2024 to avoid legal action in international courts. Experts have warned that diplomatic relations between Pakistan and Iran could be strained if Iran takes legal action to protect its rights regarding the pipeline project.
The project was initially conceived as an India-Pakistan-Iran gas pipeline, but later became a bilateral venture between Pakistan and Iran after India withdrew from it.
Despite sanctions imposed by the US on Iran over its nuclear programme, Pakistan has decided to pursue the construction of the IP gas pipeline within its borders as a commitment to Tehran.
In March 2013, the foundation stone laying ceremony of the project was held near the Iranian port city of Chabahar, at which time it was estimated to cost US$7.5 billion.
The two countries signed a Gas Sale Purchase Agreement (GSPA), which obliged Pakistan to begin construction on the IP project. However, mainly due to US pressure and sanctions on Iran, Pakistan failed to start construction on its side, while Iran claimed to have completed construction on its side.
Last year, the country's Public Accounts Committee was informed that Pakistan would have to pay a huge fine of Rs 18 billion if it did not step forward. Iran-Pakistan gas pipeline Project.
, with input from agency)



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