Efforts to finalize a long-delayed gas pipeline project between Iran and Pakistan are gaining momentum, as indicated by Iran’s Consul General to Pakistan, Hassan Nourian.
Speaking in Karachi, Nourian underscored Pakistan’s political resolve to see the project through, signaling a positive step forward.
The project, initiated in 2010, aimed to construct a 1,900-kilometer pipeline from Iran’s South Fars gas field to Pakistan’s Balochistan and Sindh provinces, with the capacity to supply 750 million to one billion cubic feet of natural gas daily for 25 years. However, concerns over potential US sanctions have impeded progress on Pakistan’s portion of the pipeline, delaying the project significantly.
Despite Iran’s investment of $2 billion in pipeline construction within its territory, Pakistan’s construction has stalled, citing international sanctions as a primary deterrent.
Islamabad’s request for a 10-year extension to commence construction, which expires this September, could potentially lead to legal repercussions if not fulfilled.
In response to looming legal action, Pakistan’s caretaker administration has recently greenlit preliminary plans to initiate an 80-kilometer segment of the pipeline. Additionally, in March, Islamabad expressed intentions to seek a US sanctions waiver for the project, although the US has expressed reservations, citing concerns about engaging in business with Tehran.
While industry observers speculate about the possibility of Iran pursuing legal action against Pakistan for failure to fulfill its commitments, discussions between the two countries continue. Nourian emphasized that the pipeline project does not fall under international restrictions, highlighting ongoing dialogue to address challenges.
Pakistan’s urgent need for affordable gas, coupled with dwindling domestic reserves and costly LNG deals amidst high inflation, underscores the significance of completing the pipeline project. Iran, possessing the world’s second-largest gas reserves, faces its own challenges with Western sanctions and political instability hindering its role as a major gas exporter.