Pakistan announced at the end of March that it was planning to ask the United States to relax possible sanctions around a natural gas pipeline project from neighboring Iran.
Islamabad wants to soon start work on the long-planned project, known as the "Peace Pipeline."
Both sides agreed to build the pipeline in 2009 but it has since faced delays and funding challenges.
Iran is now threatening Pakistan with legal action if it fails to build the Pakistani section of the pipeline.
"Pakistan wants to avoid a possible legal dispute with Iran in international courts and a fine of $18 billion (€16.6 billion)," Sabena Siddiqi, a Pakistani journalist specializing in foreign policy issues, told DW.
"Tehran has set September 2024 as a deadline for Islamabad to finish the construction of the pipeline on the Pakistani side," she said, adding: "The Pakistani section of the pipeline is about 780 kilometers long (484 miles)."
Iran has been striving to build the pipeline since the 1990s. It was originally intended to transport Iranian gas all the way to India. However, New Delhi withdrew from the project due to US sanctions against Iran over its contentious nuclear program.
Pakistan and Iran inked a 25-year supply deal in 2009, and Tehran completed building the over 900-kilometer-long Iranian section of the pipeline 10 years ago. But construction on the Pakistani side has been held up, drawing Iranian consternation.
Islamabad has now announced its intention to soon begin constructing the first 80 kilometers of the pipeline link from the Iranian border to the Pakistani port city of Gwadar, in a bid to avoid a potential Iranian lawsuit for breach of contract.
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But following the Pakistani announcement, the US said it does not support the project from going forward. Washington also warned about the risk of sanctions in doing business with Tehran.
"We do not support the Pakistan-Iran gas pipeline project," the US State Department said.
"We always advise everyone that doing business with Iran runs the risk of touching upon and coming in contact with our sanctions, and would advise everyone to consider that very carefully," a State Department spokesperson told reporters on March 26.
Pakistan is currently worried about having to pay possible financial compensation amounting to billions of dollars for delays in the construction of its section of the pipeline, said Umud Shokri, a Washington-based energy expert.
"Islamabad is aware that Iran is struggling with natural gas shortages, and that it is not in a position to export gas to Pakistan due to dilapidated infrastructure," he said.
Iran has the world's second largest natural gas reserves, behind only Russia. Still, the country confronts gas shortages almost every winter, forcing the government to ration supplies.
Excessive and inefficient consumption of subsidized natural gas, by both households as well as industry, lies at the root of the problem.
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According to information from the Energy Institute's
Iran gas pipeline: A solution to Pakistan's energy woes?
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08.04.2024
Pakistan announced at the end of March that it was planning to ask the United States to relax possible sanctions around a natural gas pipeline project from neighboring Iran.
Islamabad wants to soon start work on the long-planned project, known as the "Peace Pipeline."
Both sides agreed to build the pipeline in 2009 but it has since faced delays and funding challenges.
Iran is now threatening Pakistan with legal action if it fails to build the Pakistani section of the pipeline.
"Pakistan wants to avoid a possible legal dispute with Iran in international courts and a fine of $18 billion (€16.6 billion)," Sabena Siddiqi, a Pakistani journalist specializing in foreign policy issues, told DW.
"Tehran has set September 2024 as a deadline for Islamabad to........
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