Pakistan Seek US approval for completion of Pak-Iran Gas pipeline

May 25, 2023

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Media reports suggest that Pakistan has approached the United States with a request to either give concurrence on the construction of a gas pipeline for purchasing gas from Iran or help in paying an anticipated $18 billion penalty if the project is not completed by March 2024.

Media reports suggest that Minister Musadik Malik raised this matter with US officials during his visit to Washington earlier this month. He explained that Pakistan is legally obligated to either finish the project by March 2024 or face significant financial penalties.

It is pertinent to note that, Biden administration is not expected to proactively assist any country in advancing commercial cooperation with Tehran due to Diplomatic issues.

Media reports have indicated that Iran could impose a substantial $18 billion penalty on Pakistan if it fails to complete its portion of the pipeline by March 2024.

Iran has already completed its section of the pipeline, stretching from the gas field to the Pakistan border, where it is intended to connect with the Pakistani portion.

Once completed and commissioned, the pipeline would enable Pakistan to receive 750 million cubic feet of gas from Iran on a daily basis.

In 2014, Pakistan signed an agreement for the pipeline, which included a provision stating that Islamabad would be liable to pay billions of dollars in penalties if it abandons the project.