Pakistan and Iran held discussions regarding the finalization of the IP gas pipeline, aiming to circumvent possible economic sanctions from the United States, according to sources cited in The Express Tribune.
Pakistani Prime Minister Shahbaz Sharif and Iranian President Ebrahim Raisi held talks during Raisi's official visit to Islamabad on Monday.
The discussions revolved around completing Pakistan's portion of the pipeline, potential US sanctions in response and exploring alternative approaches to those constraints, the report said.
"Iran expressed its readiness to assist Pakistan in finding ways and means to complete the pipeline," the sources highlighted.
Washington cautioned Pakistan on Tuesday about the repercussions of its economic collaboration with Iran, threatening US sanctions.
"We advise anyone considering business deals with Iran to be aware of the potential risk of sanctions," the US State Department spokesperson stated.
Iran and Pakistan have jointly launched a marketplace and power transmission line spanning their approximately 900-kilometer border. The initiative is intended to bolster bilateral and regional trade as well as enhance energy cooperation between the two nations.
Tehran asserts that it has completed the construction of the nearly 2,700-kilometer pipeline on its side of the border, intending to export Iranian gas to its energy-deficient South Asian neighbour. Iran is waiting for Islamabad to fulfil its obligations by completing its section of the project.
According to Pakistani officials speaking at a parliamentary committee hearing earlier this year, the agreement signed between the two countries almost a decade ago stipulates that Pakistan must finish its portion of the pipeline by March 2024 or pay $18 billion in penalties to Iran.
Islamabad argues that the sanctions imposed by the US on Iran due to its nuclear program have hindered Pakistan from progressing with the pipeline's construction.