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    Iran, Pakistan Sign Revised Pipe Deal: Press


Iran-Pakistan gas pipeline has been stuck owing to US sanctions on Iran.

by: Shardul Sharma

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Iran, Pakistan Sign Revised Pipe Deal: Press

Pakistan’s Inter State Gas Systems and the National Iranian Gas Company have inked a revised agreement for the construction of the long-delayed Iran-Pakistan (IP) gas pipeline, The Express Tribune reported September 16 citing sources.

According to sources, under the revised accord, Iran would not approach any international court if there was a delay in the construction of the pipeline and neither would Pakistan pay any fine to Iran, the Pakistani newspaper reported. Pakistan would be able to construct its pipeline by 2024 after which it would buy 750mn ft3/day of gas from Iran, according to the new pact.

IP gas pipeline project has been stuck owing to US sanctions on Iran. In February 2018, Iran's oil minister Bijan Zanganeh said Pakistan had deferred Iranian gas imports for so long that Tehran is considering referring Islamabad to the international arbitration court.

According to the agreement signed between the two nations, Pakistan should have started taking 22mn m³/d of Iranian gas imports in January 2015. Pakistan is yet to start building the pipeline on its territory. Iran completed its section of the pipeline in 2011 and reportedly offered Pakistan $500mn to help with construction. The estimated total cost of the pipeline is $7bn.

The Iran-Pakistan gas pipeline deal was originally conceived to deliver Iranian gas to India via Pakistan, but New Delhi withdrew from the agreement because of security issues and high costs. And with LNG proving affordable, there may be even less appetite for long-term contracts with remote or unpopular regimes.