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Pakistan to ask Iran for relaxation on gas project deadline

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1 year ago

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  • Pakistan’s delegation will hold talks in Tehran today.
  • Islamabad will have to pay $18 billion penalty after deadline.
  • Consultants say US sanctions not to impact Pakistan’s economy. 

ISLAMABAD: Pakistan will ask Iran on Tuesday to provide relaxation on the Feb-March 2024 deadline to avert the penalty of $18 billion for not laying down a pipeline in its territory, The News reported. 

Iran asked Pakistan last year to construct a portion of the Iran-Pakistan (IP) gas line project in its territory till February-March 2024 or pay a $18 billion penalty.

Pakistan was supposed to lay down the 781-kilometre pipeline from the Iranian border to Nawabshah and start consuming 750 million cubic feet of gas daily. Tehran has already laid a pipeline from a gas field to the point bordering Pakistan.

“Pakistan’s delegation will hold talks in Tehran today (November 14, 2023) with Iranian authorities and request them not to move the international arbitration seeking the imposition of an $18 billion penalty. Energy Minister Muhammad Ali may reach Tehran today (Tuesday) but it depends upon the clearance by the PM office. However, relevant officials have reached Tehran. The Energy minister arrived back today (Monday) from Kyrgyzstan,” senior officials of the Energy Ministry told The News.

“Pakistan will also sensitise Iranian authorities of endeavouring to implement the IP gas line through a third party to avoid the US sanctions imposed against Iran for its nuclear ambitions. The government has also approached the relevant US departments to find out about the impact of curbs but they have not responded citing a lengthy process to analyse the impact. The French consultants are of the view that US sanctions will have no impact on Pakistan’s economy,” the officials said.

The Inter-State Gas Systems (ISGS) of Pakistan and the National Iranian Gas Company (NIGC) signed a revised agreement in September 2019 for the pipeline. Under this accord, Iran would not approach any international court for any delay till 2024. Afterwards, Iran would be free to move to France-based international arbitration and seek an $18 billion penalty.

The officials said that Iranian authorities will be sensitised about Pakistan’s endeavours to restructure the IP gas pipeline project to avert the US sanctions. 

“Under the new option, Pakistan may not purchase the gas directly from Iran but through a third party. Iranian authorities are also on the board for the proposal.” 

Since Pakistan cannot afford US sanctions it is pedalling very carefully to implement the project,” the sources said.

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Irfan Siddiqui meets with the PM and informs him about the Senate performance of the parliamentary party.

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The head of the Senate’s Foreign Affairs Standing Committee and the PML-N’s parliamentary leader paid Prime Minister Muhammad Shehbaz Sharif a visit in Islamabad.

Senator Irfan Siddiqui gave the Prime Minister an update on the Parliamentary Party’s Senate performance.

Additionally, Senator Irfan Siddiqui gave the Prime Minister an update on the Senate Standing Committee on Foreign Affairs’ performance.

He complimented the Prime Minister on his outstanding efforts to bring Pakistan’s economy back on track and meet its economic objectives.

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SIFC Increases Direct Foreign Investment: Investment in the Energy Sector Rises by 120%

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The Special Investment Facilitation Council is intended to help Pakistan’s energy sector attract $585.6 million in direct foreign investment in 2024–2025. The amount invested at the same time previous year was $266.3 million.

This is a notable 120% rise, mostly due to investments in gas exploration, oil, and power. Such expansion indicates heightened investor confidence and emphasizes the development potential in important areas.

The State Bank reports that foreign investment in other vital industries has increased by 48% to $771 million.

This advancement is a blatant testament to SIFC’s efficient investment procedure and quick project execution.

The purpose of the Special Investment Facilitation Council is to establish Pakistan as an investment hub by aggressively promoting regional trade and investment in the energy sector and other critical industries.

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Business

Discos report losses of Rs239 billion.

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When compared to the same period last year, the data indicates that discos have decreased their losses in the first quarter of the current fiscal year.

The distribution businesses recorded losses of Rs239 billion in the first three months of the current fiscal year, a substantial decrease from the Rs308 billion losses sustained during the same period the previous year.

Additionally, the distribution businesses’ rate of recovery has improved. It has increased to 91% in the first quarter of this year from 84% in the same period last year, indicating success in revenue collection.

Regarding circular debt, the Power division observed a notable change. Last year, between July and October, the circular debt grew by Rs301 billion. Nonetheless, this year’s first four months saw a relatively modest increase in circular debt, totaling about Rs11 billion.

These enhancements show promising developments in the electricity sector’s financial health in Pakistan, where initiatives are being made to accelerate recovery rates and slow the expansion of circular debt.

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