Pakistan issues notice to suspend gas obligation with Iran due to sanctions

Pakistan has issued a notice to Iran to suspend its obligation on the competition of the Iran-Pakistan gas pipeline project

Islamabad: Pakistan has issued a notice to Iran to suspend its obligation on the competition of the Iran-Pakistan gas pipeline project as long as US sanctions on Tehran remain in place, reported Dawn.

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, according to a written testimony Minister of State for Petroleum Musadik Malik has given to the National Assembly.

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According to the policy statement, the minister also put on record that Iran disputed the notice of force majeure and excusing event.

The statement came in response to the question of whether Pakistan had a target completion date for the cross-border energy project and whether fines were due in case of delays and if other regional nations were enhancing trade relations despite UN sanctions, as per Dawn.

Citing US sanctions for its inability to pursue the project, Islamabad issues Force Majeure and Excusing Event to Tehran, National Assembly told The Iran Pakistan Gas Pipeline Project is stalled due to international sanctions on Iran, said Malik clarifying the project activities will begin once sanctions on Iran are removed and there is no threat that State Owned Entities (SOEs) would be hit by sanctions. Given that, no date and deadline can be given for the completion of the Iran-Pakistan Gas Pipeline Project, he added.

Last week, Iranian Foreign Minister Hossein Amir Abdollahian during his three-day visit to Islamabad emphasised the need for the completion of the project saying it would definitely serve the national interests of the two countries.

While the two nations agreed to increase bilateral trade to USD 5 billion in five years, Hossein said the two sides held talks on how they find solutions to some existing banking and financial problems between the two countries within the framework of the international rules and regulations, reported Dawn.

Iran has been claiming to have completed its side of the 1,150-kilometre 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 Chahbahar in March 2013 with then-estimated cost of USD 7.5 billion.

Pakistan had committed to complete its side of the project by January 2015. However, in February 2014 then petroleum minister Shahid Khaqan Abbasi told the parliament that the Iran-Pakistan project was off the table due to international sanctions.