Iran Not to Impose Penalty on Pakistan for Gas Pipeline Delay

Iran is not likely to penalise Pakistan for delay in construction of a gas pipeline connecting the two countries, Iranian media reported Tuesday.

“Currently, Iran has no plans to demand compensation under the terms of the contract,” Managing director of National Iranian Gas Export Company (NIGEC) said, according to Mehr News Agency.

Stating that Iran has never intended to impose any penalty on Pakistan for failing to take Iranian gas, Kameli said Tehran expects Pakistan to begin construction of gas pipelines on its territory soon.

He further emphasized that Iran is not concerned over the fact that Pakistan is looking to sign a long term LNG import deal with Qatar.

“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,” Mehr News Agency quoted Kameli as saying.

The Iran-Pakistan pipeline project has been much delayed due to western sanctions imposed on Tehran. As per the agreement between the two nations signed in 2009, the first flow of gas to Pakistan should have started by Dec 31, 2014. Iran has already built 900 kilometers of the pipeline on its own soil and is waiting for the 700-kilometer Pakistani side of the pipeline to be constructed.

With Iran having signed a nuclear deal with major global powers earlier this year, sanctions are expected to be lifted which may finally lead to completion of the gas pipeline.