Exemption from IP gas line sanctions: Govt using diplomatic channels to engage with US

ISLAMABAD: The government is reportedly using diplomatic channels to engage with the United States of America authorities to seek exemption from sanctions on multi-billion Pakistan –Iran (IP) Gas Pipeline Project, well-informed sources told Business Recorder.

Minister for Power and Petroleum, Muhammad Ali recently visited Iran to discuss the project and other energy sector related issues. During the meeting both sides agreed to develop consensus to proceed with the project.

The Gas Sales and Purchase Agreement (GSPA) between Pakistan and Iran was signed in June 2009 and became effective after completing the Conditions Precedents in June 2010.

MoFA to discuss US sanctions on IP gas pipeline today

Under the project, Iran will supply gas from onshore gas processing facility at Assaluyeh to traverse a distance of 1,150 Kms up to Iran-Pakistan border (Iran Section). Pakistan section of the pipeline is to be laid from Iran-Pakistan border up to Nawabshah in Pakistan covering a distance of over 781 Km. Iran is obligated to supply 750 MMCFD under GSPA.

According to sources, Pakistan and Iran are engaged in the revival of the project. The technical team from Pakistan visited Iran in January 2023 to discuss the way forward. The Iranian technical team visited Pakistan in August 2023 wherein possible implementation options were discussed.

The Prime Minister constituted a high level Ministerial Oversight Committee (MOC) for the project to find robust workable solutions and recommend way forward keeping in view its economic viability, financing as well as political and diplomatic consequences. The Committee is holding regular meetings and considering steps that can be taken for implementation.

Based on recommendations of the Committee, Petroleum Division and Ministry of Foreign Affairs (MoFA) are actively engaged with US authorities to seek exemption from sanctions. Alternative, project implementation options are also being explored to fulfill Pakistan’s obligations under GSPA.

Pakistan is actively pursuing legal and diplomatic avenues to implement the project. International legal counsels are also engaged to help seek waiver from US sanctions and formulate workable implementation options.

Copyright Business Recorder, 2023