News ID: 214730
Published: 0220 GMT May 08, 2018

Pakistan invites Iran for talks over stalled IP gas pipeline

Pakistan invites Iran for talks over stalled IP gas pipeline

Pakistan has called on Iran to conduct pivotal talks over the Iran-Pakistan gas pipeline that was earlier abandoned by the government.

A senior Ministry of Energy official said relevant quarters have been extended an invitation in Tehran to pay a visit to Islamabad in current months before the onset of Ramadan and hold talks on the IP gas pipeline project, reported The News.

He said Prime Minister Shahid Khaqan Abbasi had instructed the Ministry of Energy to send an invitation to Iranian authorities to negotiate the IP pipeline project.

Pakistan is facing another international arbitration case as Iran threatened to take the country to The Hague for unilaterally shelving the Iran-Pakistan gas pipeline.

Iran is invoking the penalty clause of the gas sales purchase agreement (GSPA) signed between the two countries in 2009.

It was reported at the end of February 2018 that Iran sought $1.2 billion in damages as per the penalty clause from January 1, 2015. As per the agreement, if Pakistan didn't take gas supplies from Iran, it is bound to pay a fine of $1 million per day, a top official of Pakistan's Petroleum Division said.

Considering the sensitivity of the situation, Secretary Petroleum Division had sent an internal note to Prime Minister Khaqan Abbasi warning him that Iran is planning to move the arbitrating court seeking damages of $1.2 billion against Pakistan's failure to execute the project.

The IP gas pipeline has been in the rocks for over three years since Iran completed its portion of the pipeline and in wake of news in late-2016 that Pakistan had shelved the IP project under pressure from a leading Persian Gulf country.

As a result, Pakistan requested Iran for force majeure to avoid $1 million penalties per day, an official said.

Tehran had informed its Pakistani counterparts that it would be seeking a penalty of $1.2 billion via the arbitration court, which is almost equal to the cost of the entire project.

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