WASHINGTON, March 11: The United States cannot allay Pakistan’s fears that the Iran gas pipeline will trigger automatic sanctions against the country, the State Department said on Monday.

At a news briefing in Washington, the department’s spokesperson Victoria Nuland also urged Pakistan to work with the United States for exploring alternative source of energy.

I would not like to allay those fears. We have serious concerns if this project actually goes forward, that the Iran sanctions act will be triggered, said Ms Nuland when asked if she would like to ally Pakistan’s fears about the sanctions.

Immediately after President Asif Ali Zardari and Iranian President Mahmoud Ahmadinejad had officially inaugurated the gas pipeline from Iran to Pakistan, fears of likely US sanctions took its toll on the Karachi Stock Exchange, which plummeted almost 2.5 per cent, or 441 points, on Monday.

Analysts say that the latest reaction will add to the market’s nervousness. We have been straight up with the Pakistanis about these concerns and as I said about some length last week, we are also working very closely bilaterally to support alternative projects to provide Pakistan with the energy that it needs, said the State Department official when informed about the market’s reactions.

Ms Nuland, however, also expressed doubts about the project’s completion.

All of that said, we have heard this project announced about 10 or 15 times before in the past, so we have to see what actually happens, she said.

Ms Nuland said: If this project actually goes forward we have serious concerns that the sanctions will be triggered.