Pakistan has decided to formally convey to Iran that a multibillion-dollar gas pipeline project cannot move ahead due to possible US sanctions.
A Pakistani delegation would leave for Tehran by the end of this month to convey to Iranian officials there that a threat of US sanctions was the major stumbling block in implementing the Iran-Pakistan (IP) gas pipeline project, sources told The Express Tribune.
“The Foreign Office has given the go-ahead for conveying this message to Iranian officials,” said an official privy to the development.
On Thursday, the Foreign Office convened an inter-ministerial meeting where it was observed that Pakistan has failed to garner funds due to a threat of US sanctions. Even friendly countries like China have backed out from funding the project.
The meeting – which was attended by representatives from the ministries of law, finance and petroleum – agreed that Iran should be told that possible US sanctions were the major stumbling block in generating funds for the project.
On December 9, 2013, Petroleum and Natural Resources Minister Shahid Khaqan Abbasi led a delegation for talks with Iranian officials. This was the first interaction between Islamabad and Tehran on the project since the change of governments in the two countries in mid-2013.
During that meeting, Pakistan raised the issue of possible US sanctions against the IP gas project. The Pakistani side wanted to renegotiate the agreed gas price and the construction contract. But they came to know that it was difficult to implement the project amid threat of US sanctions.
Both sides agreed that experts from both countries would meet to resolve the issue of sanctions. Now, after the inter-ministerial meeting, experts from both countries will meet in Tehran by end January to discuss a way out.
Though Iran has signed a nuclear deal with the US and other Western powers, Washington has announced that it has not changed its stance on the IP project.
A Pakistani delegation, led by the ministers of petroleum and water and power, visited Washington in the second week of November last year and requested US officials to exempt the IP pipeline from sanctions. However, the US officials were non-committal.
Pakistan had requested Iran to finance the laying of entire pipeline, estimated at $2 billion. Earlier, Iran had committed $500 million and in response Pakistan had pledged to award the construction contract to the Iranian firm, Tadbir Energy. However, Iran backed out and the contract to Tadbir Energy was terminated.
Published in The Express Tribune, January 19th, 2014.