Iran responds to Pakistani 'sanctions' by threatening legal action over unfinished gas pipeline

Published January 9th, 2016 - 04:00 GMT

A senior Iranian official has said that Tehran will take action should Pakistan fail to meet its obligations with regard to the construction of a pipeline for receiving Iran’s natural gas.

“Iran has taken plenty of measures with regard to gas exports to Pakistan and has already laid out a major part of the pipelines as far as the Pakistani borders,” Ali-Reza Kameli, CEO of National Iranian Gas Exports Company, said.

“It would be natural that every country would think about the interests of its own people. Therefore, if Pakistan’s action harms our interests we will definitely act in line with terms of the contract,” Iranian petroleum ministry’s official monthly Iran Petroleum quoted Kameli as saying.

He complained that Pakistan has not taken “any specific action with regard to the construction of 780 kilometers of gas pipeline on its soil under the pretext of sanctions on Iran.”

“Therefore, the project has been held in abeyance…In every contract, penalties are envisaged for non-compliance with obligations, but Iran does not like to enter the phase of penalties vis-à-vis its neighboring country with which it has friendly ties,” said Kameli.

Iran plans to deliver 21.5 mcm/d of gas to Pakistan.

Iran looks on course to emerge from sanctions under a July 2015 nuclear deal.

However, Islamabad was dragging its feet even before the West imposed new sanctions on Tehran in 2012.

The US has long pressed Pakistani officials against going for the pipeline, promoting Turkmen over Iranian natural gas even though the route requires the extra mile of more than 700 km across volatile regions in Afghanistan.

The energy crisis in Pakistan which suffers about 12 hours of power cuts a day has worsened in recent years amid 4,000 megawatts of electricity shortfall.

Iran has completed its part of the gas pipeline project with more than $2 billion of investment but Pakistan has fallen behind the target to take gas deliveries in the winter of 2014.

Contractually, Pakistan has to pay steep fines to Iran for failing to build and operate its section of the pipeline by the winter of 2014.

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