ISGS, NIGC ink revised accord for IP gas pipeline project

Iran will not approach any international court, nor would Pakistan pay fine in case of delay

ISLAMABAD: The Inter State Gas Systems (ISGS) of Pakistan and the National Iranian Gas Company (NIGC) have inked a revised agreement for the construction of the gas pipeline between the two countries.

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.

Both the sides would mutually chalk out a practical solution for the completion of the project. Pakistan would be able to construct its pipeline by 2024 after which it would buy 750 million cubic feet gas from Iran daily.

For more than four years, the IP gas project was off the table due to international sanctions - both multilateral imposed by the United Nations and the unilateral clamped by the United States, Canada, United Kingdom and the European Union.

The unilateral sanctions imposed by the US were the most severe amongst all international restrictions – Iran Sanctions Act 1996, Comprehensive Iran Sanctions, Accountability and Divestment Act 2010 and National Defence Authorisation Act-2012.

The construction work on the Pakistani section of the pipeline had been inaugurated in March 2013 and it was planned to be completed within 22 months.

On Feb 25, 2014, the then petroleum minister Shahid Khaqan Abbasi told the National Assembly that the project for the moment was off the table, citing international sanctions as the issue. He said, "In the absence of international sanctions the project can be completed within three years, but the government cannot take it any further at the moment because international sanctions against Iran are a serious issue."

The IP gas pipeline, also known as the Peace pipeline, is an under-construction 2,775 kilometres pipeline to deliver natural gas from Iran to Pakistan.

The pipeline would be supplied from the South Pars field. It starts from Asalouyeh and stretches 1,172km through Iran.
The Iranian section is known as Iran’s seventh cross-country gas pipeline.

The first 902km part of this section runs from Asalouyeh to Iranshahr. The second 270km part runs from Iranshahr to the Pakistan- Iran border.

(With additional input from agencies)