Iran-Pakistan Gas Pipeline: Iran Threatens $18 Billion Lawsuit, US Warns Pakistan of Sanctions

The US has declared its opposition to the proposed gas pipeline between Iran and Pakistan. Washington is not in favor of the initiative, according to US State Department spokesman Matthew Miller on Wednesday.

“We oppose the continuation of this pipeline. Miller alerted the Pakistani government to the possible consequences of doing business with Tehran. “We always advise everyone that doing business with Iran runs the risk of touching upon and coming in contact with our sanctions, and we would advise everyone to consider that very carefully,” Miller said.

Musadik Malik, Pakistan’s minister of petroleum, said that his country will ask the US for an early waiver on the gas pipeline project. According to news agency The News, Musadik Malik said, “Pakistan will vigorously present its case and will try to seek exemption from US sanctions by presenting technical and political arguments.”

He said that work on the proposed gas pipeline would shortly start.

After Iran sent Pakistan a third notice in January stating that it planned to take the country to arbitration over the pipeline’s non-laying as part of the Iran-Pakistan gas line project, Pakistan found itself in a difficult situation.

Iran has vowed to punish Pakistan with $18 billion at the international arbitration court for allegedly breaking a contract.

Although the project was first announced in 2009, delays have been occurring since 2014. 2015 was the intended deadline.

Tehran disagrees with Pakistan’s claim that the US sanctions on Iran prevented it from finishing the project on its soil.

A 900-kilometer pipeline has also been built in Iran.

The Peace Pipeline, sometimes referred to as the Pakistan-Iran gas pipeline, is a long-term undertaking connecting Islamabad and Tehran. According to a report by Reuters, the pipeline would transmit natural gas from Iran to Pakistan, a neighboring country.

In August 2023, Iran and Pakistan inked a five-year trade agreement with a $5 billion bilateral trade goal.

Pakistan is in the process of applying for the 24th bailout from the International Monetary Fund due to its economic woes.