Negotiations on the Iran-Pakistan Gas Pipeline

In a new development, Iran has invited Pakistan’s legal team led by ABS & Co. to thrash out if US sanctions on Iran are applicable to the Gas Sales Purchase Agreement signed between Iran and the Islamic Republic of Pakistan in 2009.

The project was to be implemented under a segmented approach where Iran had to lay down the pipeline on its side and Pakistan had to build the pipeline in its territory. The project was to be completed by December 2014 and come on stream from January 1, 2015. Under the penalty clause it was agreed by both sides that if Pakistan fails to accept the intake of Iranian gas from January 1, 2015, it will have to pay $1 million per day as liquidated damages.

Pakistan has failed to lay down the pipeline of 781km in its territory on account of its failure to arrange funding because of the US led sanctions imposed on Iran.

The Iranian team has asked Pakistan to initiate concerted efforts to get a waiver from the US for implementation of the IP gas line project if US sanctions are applicable on gas related transactions. In this regard, Iran has invited Pakistan’s legal team for further negotiations on the matter.

Ahmer Bilal Soofi and Sarjeel Mowahid are leading the team on this matter for Inter-State Gas Systems Private Limited. Daud Aziz Khokhar, Ahmed Reza Mirza are also involved.

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