Pakistan, Iran sign revised IP agreement

Islamabad: The Inter State Gas Systems (Private) Limited (ISGS) and the National Iranian Gas Company (NIGC) on Monday signed a revised agreement for the much-delayed Iran-Pakistan (IP) gas pipeline project.

As per the revised agreement, Pakistan will no longer have to pay fine to Iran and Iran will not go to an arbitration court for delay in IP pipeline construction.

The two countries will work together to find a viable solution to the project. Furthermore, Pakistan can build the IP pipeline till the year 2024 for buying 750 million cubic feet of natural gas per day (MMCFD) from Iran.

For more than four years, the IP gas project was off the table due to international sanctions – both multilateral imposed by the United Nations and the unilateral clamped by the United States, Canada, United Kingdom and the European Union.

The sanctions imposed by the US were the most severe amongst all international restrictions – Iran Sanctions Act 1996, Comprehensive Iran Sanctions, Accountability and Divestment Act 2010 and National Defence Authorisation Act-2012. The construction work on the Pakistani section of the pipeline had been inaugurated in March, 2013 and it was planned to be completed within 22 months.

On February 25, 2014, former Minister for Petroleum and Natural Resources Pakistan, Shahid Khaqan Abbasi told the National Assembly that the project for the moment is off the table, he cited international sanctions as the issue, he said ” In the absence of international sanctions the project can be completed within three years, but the government cannot take it any further at the moment because international sanctions against Iran are a serious issue”.

The Iran-Pakistan gas pipeline, also known as the Peace pipeline, or IP Gas, is an under-construction 2,775-kilometre (1,724 mi) pipeline to deliver natural gas from Iran to Pakistan.

The length of the pipeline that will be supplied from the South Pars field has been given variously as 900 kilometres (560 mi), 1,035 kilometres (643 mi), and 2,775 kilometres (1,724 mi). It starts from Asalouyeh and stretches 1,172 kilometres (728 mi) through Iran.

The Iranian section is known as Iran’s seventh cross-country gas pipeline. The first 902-kilometre (560 mi) part of this section runs from Asalouyeh to Iranshahr. The second 270-kilometre (170 mi) part runs from Iranshahr to the Iran-Pakistan border.