Iran and Pakistan’s Endeavor to Finalize the Gas Pipeline Project

“Exploring Pathways: Iran and Pakistan’s Endeavor to Finalize the Gas Pipeline Project”

Iran and Pakistan are exploring ways to complete a long-delayed gas pipeline project between the two countries, according to Iran’s Consul General to Pakistan, Hassan Nourian. The pipeline, originating from Iran’s South Fars gas field and extending to Pakistan’s Balochistan and Sindh provinces, was agreed upon in 2010. However, progress on Pakistan’s portion has been stalled due to concerns over US sanctions.

The pipeline, spanning 1,900 kilometers, was intended to supply 750 million to one billion cubic feet per day of natural gas for 25 years to meet Pakistan’s growing energy needs. Iran claims to have invested $2 billion in the pipeline’s construction on its territory, but Pakistan has not started construction, citing international sanctions on Iran.

In 2014, Pakistan requested a 10-year extension to build the pipeline, which expires in September this year. If Pakistan fails to complete its side of the pipeline this year, Iran could potentially take legal action.

Earlier this year, Pakistan’s caretaker administration gave the go-ahead in principle to start plans to build an 80km segment of the pipeline. In March, Islamabad announced it would seek a US sanctions waiver for the pipeline. However, the US has stated it does not support the project and warned about the risk of sanctions in doing business with Tehran.

Nourian stated on Monday that the pipeline did not fall under international restrictions, and that the two countries were discussing the issue. He did not comment on the potential for Iran to take legal action against Pakistan if it did not complete its side of the pipeline this year.

Pakistan, whose domestic and industrial users rely on natural gas for heating and energy needs, is in dire need of cheap gas as its own reserves are dwindling fast and LNG deals are making supplies expensive amidst high inflation.

Iran has the world’s second-largest gas reserves after Russia, according to BP’s Statistical Review of World Energy, but sanctions by the West, political turmoil, and construction delays have slowed its development as an exporter.