Reneging on contract: Pakistan obliged to complete gas pipeline, says Iran

Deputy oil minister says Islamabad was aware of possible pressure at the time of signing the deal.

TEHRAN:

Iran’s oil ministry said on Wednesday that Pakistan is contractually obliged to complete the multibillion-dollar gas pipeline project.

The warning came a day after Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi said work on the Iran-Pakistan pipeline was not possible because of sanctions imposed by the United States and the European Union on Tehran over its nuclear drive.

“Iran has carried out its commitments ... and expects the Pakistani side to honour its own,” Iran’s deputy oil minister Ali Majedi said in a statement seen by AFP.

“They should even pick up the pace of work and make up for falling behind schedule” in constructing Pakistan’s 780-kilometre side of the pipeline, he said.

Iran says work on its side in the $7.5-billion project launched in 2010 is almost finished. But the project’s fate has faced uncertainty, with Pakistan repeatedly running into problems, including major financing issues, while being pressured by the US.

On Tuesday, Abbasi told AFP that the work on the pipeline “is affected by the sanctions imposed” on Tehran. He did not elaborate on how the sanctions could derail the project.

In Tehran, Majedi rejected the argument, saying the issue of sanctions was not a new development. “Pakistan faced pressure at the time of signing the deal,” he said. “But fully aware of the situation and the issue of sanctions, it still signed the contract.”

Majedi added that the option of “bringing in a third party to finish the pipeline” had been raised in recent negotiations with Pakistani officials. He did not elaborate. 

Published in The Express Tribune, February 27^th, 2014.