Iran cannot shelve IP gas pipeline project unilaterally: Abbasi

Pakistan Today

ISLAMABAD - Petroleum and Natural Resources Minister Shahid Khaqan Abbasi on Thursday said Iran could not shelve the multibillion dollar gas pipeline project unilaterally.

The project aimed at providing 21.5 million cubic meters of gas per day to Pakistan from next year.

Commenting on reports about Iran’s apprehensions about the project, Abbasi told Pakistan Today that Islamabad would seek an explanation from Tehran about Iranian Oil Minister Bijan Namdar Zanganeh’s reported comments that the contract for supplying gas to Pakistan was likely to be annulled.

“We have already sought a meeting with Iranian officials on the project and their minister’s statement would also be brought up during the meeting,” he said.

Abbasi denied there was foreign pressure on Pakistan to withdraw from the $7.5 billion project with Iran. He claimed that financing of the project and international economic sanctions on Tehran were the major hindrances in further progress on the project.

He said that no international financial institution was ready to finance the project because of the economic sanctions on Iran. “Pakistan does not consider the sanctions as a barrier in going ahead with the project but financial institutions are reluctant to invest in the project,” he added.

The petroleum minister said that Pakistan would not be liable to pay penalties to Iran under the bilaterally signed agreement if the financing issue was not resolved because of the sanctions.

According to sources, beside the financing problem of the project, pressure from the US, Saudi Arabia and European countries were behind the repeated delays in the process. “The present government neither has the will nor the capacity to handle this important project despite the fact that the country is going through an acute shortage of gas,” they claimed.

Pakistan is likely to face acute gas shortage in winter and all compressed natural gas (CNG) filling stations in Punjab will be shut down from November to January. The Iranian side of the project is almost complete, but Pakistan has run into repeated problems paying for the 780 kilometre section to be built on its side of the border.

US officials have been warning Pakistan that the project would risk sanctions.