Tehran cautioned Islamabad over falling behind the schedule in fulfilling its obligations in a multi-billion-dollar pipeline project that is to take natural gas from Iran to Pakistan.
“Under a contract signed between Iran and Pakistan, the latter had to deliver its commitments by starting import of Iran’s gas supplies in December 2014, but it seems unlikely for Pakistan to take any (serious) measure before the end of 2015,” Managing Director of the National Iranian Gas Company (NIGC) Hamid Reza Araqi said addressing a press conference in Tehran on Saturday.
He further rejected rumors that Iran has decided not to fine Islamabad for its long delay in completing the project, and stressed that the terms of the contract about the fines that Pakistan should pay in case it delays fulfilling its undertakings are still alive and enforceable.
Under the Gas Sales Purchase Agreement (GSPA) signed with Iran by the outgoing PPP government in 2009, the first flow of gas to Pakistan should have started by Dec 31, 2014.
In February, Pakistan sent a team to Iran to seek extension in the implementation of the Iran-Pakistan (IP) gas pipeline project.
Iran and Pakistan officially inaugurated the construction of the border part of the multi-billion-dollar gas pipeline project in March, 2013.
The project kicked off in a ceremony attended by former Iranian President Mahmoud Ahmadinejad and his former Pakistani counterpart Asif Ali Zardari at the two countries’ shared border region in Iran’s Southeastern city of Chabahar.
The 2700-kilometer long pipeline was to supply gas for Pakistan and India which are suffering a lack of energy sources, but India has evaded talks. In 2011, Iran and Pakistan declared they would finalize the agreement bilaterally if India continued to be absent in the meeting.
Iran has already built 900 kilometers of the pipeline on its own soil and is waiting for the 700-kilometer Pakistani side of the pipeline to be constructed.
The IP pipeline is designed to help Pakistan overcome its growing energy needs at a time when the country of over 180 million people is grappling with serious energy shortages.
According to the project proposal, the pipeline begins from Iran’s Assalouyeh Energy Zone in the South and stretches over 1,100 km through Iran. In Pakistan, it will pass through Baluchistan and Sindh but officials now say the route may be changed if China agrees to the project.