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August 22, 2019

IP gas pipeline: Iran takes back notice on moving international court

Top Story

August 22, 2019

ISLAMABAD: In a positive development, Iran has withdrawn its notice it earlier issued in February 2019 to Pakistan saying it is going to move arbitration court against Pakistan for not laying down the pipeline in Pakistan’s territory in stipulated time under the IP gas pipeline project and threatened to invoke the penalty clause of Gas Sales Purchase Agreement (GSPA).

However, under the latest scenario, Pakistan has told Iran that Islamabad fully acknowledged the rights of Tehran under GSPA about the IP gas line but at present Pakistan found hard to implement the IP gas line in the presence of the reinforced US sanctions.

One of the top men at the Petroleum Division, in the federal cabinet meeting held on last Tuesday, did not amend the IP gas line deal, rather gave an approval to authorities concerned to sign a document assuring the Iranian side that Pakistan is still for IP gas line and acknowledges the rights of Iran under GSPA. In that signed document, Iran has also agreed to withdraw the notice it earlier extended to Pakistan in February 2019.

At present, legal teams of both sides are engaged whether gas transactions between the two countries invite the US sanctions are not. Iranian side said that US curbs do not apply on gas supply, but Pakistani side thinks otherwise. However, the legal teams from both sides are fully engaged on this particular issue.

Earlier in 2018, the authorities in Iran conveyed to Pakistan that it may move the arbitration court against Pakistan for unilaterally shelving IP gas line project invoking penalty clause of the GSPA. However, this time Iran formally gave the notice to Pakistan in February 2019 threatening to move the arbitration court for delaying the project.

The official sources said that during the visit of Prime Minister Imran to Iran, the top leadership took up the issue of IP gas line and told Pakistan leadership it will take back the notice only if the government of Pakistan extends the construction period of pipeline of 781 kilometres from Iranian border to Nawabshah under signed GSPA. After coming back to Pakistan, prime minister asked the Petroleum Division to stay in touch with authorities in Iran and resolve the issue.

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