Iran threatens Pakistan with $18bn penalty for delay in pipeline project

ISLAMABAD – Iranian authorities warned Pakistan of an $18 billion penalty if Islamabad fails to complete the multi-billion-dollar gas pipeline project despite US sanctions.

A report by The News quoting an official of the Ministry of Energy claimed that Tehran gave a deadline of February-March 2024 to Pakistan to construct a portion of the Iran-Pakistan gas line project in its territory, or face a hefty penalty.

It was reported that Iranian officials conveyed this to the visiting Pakistani delegation earlier this month, calling on Pakistani authorities to complete the gas pipeline agreement in a year's time. Iran has already completed its part from the gas field to the Pakistan border.

The neighbouring countries inked the pact back in 2009 under the PPP government. According to the agreement, Islamabad was supposed to build around 800 kilometres long pipeline but the project continued to be delayed for 13 years.

Over the years, Pakistani authorities have informed Tehran that it cannot continue with the project in wake of sanctions by the US.

As per the agreement, Iran could not move to any international court in case of delay till 2024. In 2019, Iran warned to move an arbitration to invoke the penalty clause.

Pakistan maintained commitment to execute the project but only if international sanctions on Tehran are lifted.