Pakistan shelves multi-billion dollar gas pipeline project with Iran under pressure from U.S: Report

Pakistan has decided to temporarily shelve a substantial multi-billion dollar gas pipeline project intended to facilitate the import of cost-effective energy from its neighbouring nation, Iran as per recent reports.

The move comes amidst indications that the project has been put on hold due to external pressures, particularly from the United States.

According to a report by PTI, Pakistan’s recent decision to shelve a multi-billion dollar gas pipeline project with Iran has ostensibly been influenced by pressures from the United States.

The U.S. has imposed sanctions on Iran in connection with its nuclear program, which is believed to have impacted Pakistan’s course of action.

Originally conceived as a trilateral undertaking involving India, Pakistan, and Iran, the gas pipeline project underwent a transformation over time. It ultimately evolved into a bilateral venture between Pakistan and Iran after India’s withdrawal from the initiative.

The Dawn newspaper has reported that Pakistan formally invoked a ‘Force Majeure and Excusing Event’ clause, signaling a suspension of its contractual obligations concerning the Iran-Pakistan (IP) gas pipeline project. This decision, attributed to factors beyond Islamabad’s control, underscores Pakistan’s inability to proceed with the initiative as long as U.S. sanctions on Iran remain in effect. The newspaper noted that the project, which has remained dormant for nearly a decade, is a topic of concern in a nation grappling with severe energy shortages, given its population of 240 million people.

The dynamics surrounding this project highlight the intricate interplay of geopolitical forces, economic imperatives, and external influences shaping Pakistan’s strategic decisions in the realm of energy infrastructure development.

According to a written testimony Minister of State for Petroleum, Musadik Malik has given to the National Assembly. “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.”

Sunil Kumar Dhangadamajhi

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