Pipeline construction delay: NIGEC says Iran won't impose fine on Pakistan

11 Nov, 2015

Managing Director of National Iranian Gas Export Company (NIGEC) has said Iran has currently no plans to fine Pakistan for delay in gas pipeline construction, an Iranian news agency reported on Tuesday. On the possibility of fining Pakistan due to a nearly one-year delay in importing gas from Iran, Alireza Kameli said, "currently, Iran has no plans to demand compensation under the terms of the contract."
Stressing that Iran has never intended to fine Pakistan for failing to take Iranian gas, Kameli asserted "we expect Pakistan to begin construction of gas pipelines on its territory." The Iranian official stressed that Pakistan has taken no action to meet its obligations of building part of a pipeline to bring natural gas from Iran, adding "the normal sequence is to first construct gas pipelines before negotiating with partners on purchasing natural gas". He further emphasised that Iran is not concerned over the newly-signed contract between Pakistan and Qatar for importing LNG.
"We have no worries over the long-term due to the high costs of importing LNG in comparison with construction of pipelines for gas import," Kameli reiterated. The $7.5 billion Iran-Pakistan (IP) pipeline was inaugurated with great fanfare in March 2013 - but the project immediately hit quicksand in the form of international sanctions on Tehran, which meant cash-strapped Pakistan struggled to raise the money to build its side.

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