Pakistan steps away from Iran gas pipeline deal

Pakistan announced today that it will back down from the Iran-Pakistan gas pipeline deal in anticipation of the coming US sanctions against Iran.

Reuters reports that Prime Minister Yusuf Raza Gilani told a press conference: “If the U.S. imposes sanctions, they will have international implications and Pakistan as a member of the international community will follow them.”

US special envoy to Pakistan, Richard Holbrooke urged Pakistan to be wary of going ahead with the gas pipeline deal with Iran since it could be in violation of US sanctions being approved by Congress.

The US Congress is in the course of passing tighter sanctions on Iran on top of the new sanctions imposed by the new UN resolution which was passed on June 9.

Holbrooke urged Pakistan to await the finalization of the US legislation before going ahead with the pipeline deal which was signed in March.

The last amendments to this deal were signed between Iran and Pakistan officials last week.

The gas pipeline was primarily supposed to extend into India but India-Pakistan conflicts led to India stepping away from the deal.

The deal would have provided 21.5 million cubic metres of natural gas for Pakistan on a daily basis, starting year 2014.

While the move by Pakistan will mean a significant financial loss to Iran, critics of Mahmoud Ahmadinejad government had repeatedly accused him of sacrificing national interests in this deal and selling the country’s resources at a low price to satisfy his political ambitions.