Foreign Ministry urges immediate progress on IP gas pipeline without further delays

The Ministry of Foreign Affairs (MoFA) has suggested to the Petroleum Division that the Iran-Pakistan (IP) gas pipeline project should proceed without any additional delays.

According to a news report, Petroleum Division officials apprised during a recent interministerial meeting at MoFA that the Federal Cabinet and the Cabinet Committee on Energy (CCoE) have approved the Ministerial Oversight Committee's (MOC) recommendations, which were established following instructions from the Prime Minister.

The Secretary of Foreign Affairs recommended that, given the project's significance for energy, the Petroleum Division should promptly commence pipeline construction.

The government plans to use Rs45 billion from the Gas Infrastructure Development Cess (GIDC) for the pipeline's construction, noting concerns over a potential $18 billion contractual liability if the project is further delayed.

An allocation of up to Rs2.5 billion is available for the fiscal year 2023-24, with the remaining Rs42.5 billion to be potentially allocated in the next fiscal year upon the GIDC board's approval.

The Ministerial Oversight Committee has advised beginning construction of the gas pipeline from Gabd Remdan to Gwadar, spanning 80 kilometers, using GIDC funds. 

The submission of a waiver application to US authorities has been postponed due to the current geopolitical climate.

Additionally, the oversight committee recommended that another high-level committee address outstanding issues with Iran, including the notice of Material Breach and contract extension, under the French Civil Code. 

Meanwhile, Pakistan will also keep engaging with Russia, China, Turkmenistan, and Azerbaijan for gas swap arrangements related to the project.