Under the weight of US sanctions against Iran, Pakistan has reportedly abandoned a multi-billion dollar gas pipeline project intended to import inexpensive energy from neighboring Tehran, according to local media reports on Monday.
The development comes as Pakistan struggles to put its cash-strapped economy in order with the help of the International Monetary Fund, which agreed to provide USD 3 billion in loan.
The project was initially conceived as an India-Pakistan-Iran gas pipeline, but later, India left it and became a bilateral project between Pakistan and Iran.
The sanctions imposed by the US on Iran over its nuclear programme have deterred Pakistan from constructing the pipeline.
“Pakistan has issued a Force Majeure and Excusing Event notice to Iran under the Gas Sales and Purchase Agreement (GSPA), which resultantly suspends Pakistan’s obligations under the GSPA,” according to a written testimony Minister of State for Petroleum Musadik Malik has given to the National Assembly.
In a policy statement, the Pak minister also put on record that Iran disputed the notice of force majeure and excusing event. This came in response to questions from lawmakers, who wanted to know if the government of Pakistan had a target completion date for the cross-border energy project and whether fines were due in case of delays and if other regional nations were enhancing trade ties despite UN sanctions.
