Pakistan & Iran Agree on Joint Gas Pipeline Implementation Plan
16:10 17.11.2023 (Updated: 16:21 17.11.2023)
The implementation plan for the Iran-Pakistan (IP) gas pipeline is being developed jointly by Pakistan and Iran, and discussions are expected to begin in the next two to three weeks.
Pakistan and Iran have reached an agreement to collaboratively devise a comprehensive implementation strategy for the Iran-Pakistan (IP) gas pipeline, according to local media.
The decision emerged following a meeting between the two parties in Tehran, where Islamabad requested leniency regarding the deadline of February– March 2024 to avoid paying a $18 billion fine for not installing a pipeline within its borders.
Last year, Iran demanded that Pakistan either pay a $18 billion fine or allow part of the gas line project to be built on its territory by February or March 2024, media reported.
In response to questions regarding the gas project and the $18 billion in fines, the minister of energy stated that both nations had chosen
to explore methods to implement the project and the negotiation plan would begin in the next two to three weeks.
"Pakistan has held constructive talks in Tehran, and Pakistan has renewed its commitment to the project", said Muhammad Ali, Pakistan’s Energy Minister. Pakistan agreed to take into consideration the Iranian side's offer to export additional electricity to Gwadar and Chaman during the negotiations.
According to Ali, Pakistan requires more electricity from Iran for Gwadar, provided a better tariff is negotiated.Although China is building a 300MW power plant in Gwadar using imported coal, it may not be able to meet future demand.
"Once the national grid gets installed at Gwadar, Pakistan can also use more Iranian electricity for its national use", said the Minister.
Despite this, the September 2024 deadline set by Iran for moving international arbitration would still apply, giving ample time for exploring bilateral avenues.