Aug 9, 2023
Pakistan: Gas Pipeline Project With Iran on Track
By Ayaz Gul
ISLAMABAD — Pakistan said Wednesday it is "actively engaged" with Iran to try to dissuade it from pursuing international arbitration over constructing a major gas pipeline to link the two nations, rejecting recent media claims that the multibillion-dollar project has been shelved.
Musadik Malik, the Pakistani minister of state for petroleum, told a news conference that Islamabad had until March 2024 to negotiate a settlement with Tehran to avoid any legal battles, saying both sides are working closely to "come up with creative solutions" to keep the project on track.
"We need that [Iranian] gas. We are actively engaged [with Iran's government] towards having that gas because that gives us energy security," Malik said.
He spoke in response to last week's media reports claiming Pakistan had abandoned its decadelong effort to import cheap Iranian energy because of fears the U.S. economic sanctions against Iran over its nuclear program could also hit Pakistani state-owned entities.
The reports quoted the minister telling lawmakers last week that the pipeline "is stalled due to international sanctions on Iran" and will only resume when the sanctions are lifted.
Speaking Wednesday, Malik rejected the reported assertions, saying they misrepresented his written testimony to the parliament. He admitted, however, that the "vague" and "insufficient" information in his official text were to be blamed for causing the confusion.
The minister said the references and communications with Iran documented in his testimony "go back about 10 years" when Pakistan initially asked Tehran to suspend the project citing the U.S. sanctions.
Malik acknowledged, however, that the U.S. and the United Nations sanctions on Iran had mainly deterred cash-strapped Pakistan from laying the pipeline from the Iranian border to Nawabshah in southern Sindh province since signing the agreement with the Iranian government in 2013.
Iran maintains that it has finished constructing its part of the pipeline, running from the Persian Gulf to the border of Pakistan's southwestern Baluchistan province. Earlier this year, Tehran warned Islamabad that if it failed to complete its section of the project by March 2024, it would be required to pay a penalty of about $18 billion.
"We are using all of our creative thinking, as well as the legal instruments available, as well as the foreign policy instruments available, to make sure that Pakistan under no circumstances comes under sanctions," Malik said.
He declined to disclose the amount Pakistan will owe Iran as a financial penalty, insisting the two countries will be able to reach a settlement by the March deadline.
Malik's assertions echoed remarks Iranian Foreign Minister Hossein Amirabdollahian made during last week's visit to Islamabad, where he announced Tehran's readiness to help urgently complete the long-delayed pipeline.
"We held important discussions on how we can find solutions to some existing banking and financial problems between the two countries within the framework of the international rules and regulations," Amirabdollahian told reporters without elaborating.
The Iranian chief diplomat stated that the gas pipeline project would "serve the national interests" of the two neighboring countries.
"We stand ready to see this gas pipeline be completed, finalized and operationalized as soon as possible," he added.
Amirabdollahian's three-day visit came amid an expansion in bilateral economic and trade ties.
In May, Iran and Pakistan opened their first joint marketplace and an Iranian power transmission line along their nearly 900-kilometer border.