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Iran ends cooperation agreement with Pakistan

Staff writer |
Iran has unilaterally ended the government-to-government cooperation agreement with Pakistan, and after this decision the Iran-Pakistan IP gas pipeline project has become unfeasible.

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A copy of official documents seen by Daily Times disclosed that the Ministry of Petroleum and Natural Resources on October 2 revealed to the federal cabinet’s ECC that Iran has unilaterally ended government-to-government cooperation agreement with Pakistan and is not even prepared to offer $500 million for the construction of the long-awaited IP gas pipeline project.

With this decision the IP gas pipeline project, in its present form, has become not feasible.

According to an agreement signed earlier between the two countries for the supply of natural gas to the country, Pakistan had been made bound to purchase gas from Iran till December 2014. Pakistan would pay one million dollars per day as penalty to Iran in case of its failure to purchase the Iranian gas.

It has also been told to the ECC that Inter State Gas System; a company of petroleum ministry has issued a notice to Iran on IP gas pipeline project. The ISGS has claimed forced majeure on the basis of international sanctions on Iran, while under the forced majeure it has become unfeasible for Pakistan to work on the said gas import project. A clause of forced majeure has been included in the IP agreement, Petroleum Ministry informed the ECC meeting.

Officials in the Petroleum Ministry believe that if sanctions on Iran are lifted in the future, Pakistan would have to ink a new agreement with Tehran for the purchase of Iranian gas to meet its energy demands. “Force majeure has been claimed under the IP gas line project,” a source said.

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