Iran rejects Pakistan’s demand to defer penalty

21 July 2014 | 21:10 Code : 1936129 Latest Headlines

Iran has turned down Pakistan’s request to invoke the force majeure clause for not completing the Pakistan section of the Iran-Pakistan (IP) gas pipeline because of the U.S. sanctions imposed on Iran, Pakistani Minister of Petroleum and Natural Resources Shahid Khaqan Abbasi said.
“Pakistan submitted its request to Iran some six months back seeking to invoke the clauses pertaining to force majeure in view of the U.S. sanctions that have factually impeded Pakistan from initiating the laying down of the pipeline. Pakistan requires foreign funding and foreign companies’ consortium mainly because of financial constraints,” the minister told The News.
Khaqan Abbasi said no international company was ready to join the project because of the U.S. economic curbs and this was the very reason due to which the required funds could not be arranged to complete the project.
“We have sensitized Iran on this particular issue time and again and ultimately Pakistan told Iran about invoking of force majeure clause to avoid the penalties.”However, Iran has refused to agree to the proposal as Pakistan will have to pay a penalty of $2 million a day to be effective from January 1, 2015.
Under the Gas Sales Purchase Agreement with Iran, Pakistan is bound to complete the pipeline by December 31, 2014 which is just under six months away. 

tags: Pakistan iran

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