Iran's 'ultimatum' to Pakistan, may have to pay billions for delaying the IP gas pipeline project!

Iran has given a 'final notice' to Pakistan for delaying the IP gas pipeline project, Iran has said that it will approach the Paris Arbitration Court next month over it.

The Iran-Pakistan Gas Pipeline Project was to be completed by December 2014 and was to be operational from January 1, 2015. Under this, Iran would lay the pipeline on its side and Pakistan would construct it in its territory. However, the delay of 10 years has not only put this project in trouble but has also created big problems for Pakistan.

The project was delayed by 10 years due to sanctions imposed by the US in 2014. Under French law, the Gas Sales Purchase Agreement (GSPA) was signed between the two countries in 2009. Any dispute related to this has to be settled through the Paris-based arbitration court. The special thing is that the French arbitration court does not consider US sanctions as a valid reason for the delay.

According to senior official sources, Pakistan's Interstate Gas System (ISGC) and Iran's National Gas Company (NIGC) signed a revised contract in September 2019, according to which Pakistan was to complete this project on its land by 2024. But despite Iran extending the deadline, Pakistani officials failed to do so.

The notice increased the concern of the Pakistan government

All the top officials of the Pakistan government are very worried about this notice received from Iran. They are preparing to hire a foreign law firm to represent Pakistan in the Paris Arbitration Court. Talking to The News, officials of the Pakistan government said that we have not been able to complete this project due to US sanctions. We tried our best to seek exemption from sanctions from the US, but the Biden administration is against the IP gas pipeline project.

According to the original agreement, if Pakistan fails to complete this project, it will have to pay a penalty of 1 million dollars per day to Iran from 1 January 2015. In such a situation, it is believed that if Iran approaches the Paris Arbitration Court, then Pakistan will have to pay a penalty of billions of dollars.