Iran-Pakistan gas pipeline gets a reset, can it overcome sanctions?

KARACHI — Just months after carrying out tit-for-tat attacks across the Pakistan-Iran border, Tehran and Islamabad are trying to get the stagnant Iran-Pakistan natural gas pipeline moving. This week, Pakistan’s Cabinet Committee on Energy has been finalizing the construction of an 50-mile patch of the pipeline from the Iranian border to the Pakistani port city of Gwadar.

Initially conceived as the Iran-Pakistan-India pipeline under plans laid in 1994, it became a bilateral project between Iran and Pakistan after India dropped out in 2008 amid increasing US sanctions on Iran.

Completed on the Iranian side, the pipeline extends nearly 700 miles from the Pars Special Economic Energy Zone to Iranshahr and Bushehr Fars, Kerman, Hormozgan and ends in the Sistan and Baluchestan province on the Pakistan-Iran border. From there on, the pipeline would stretch an additional 500 miles across the Pakistani provinces of Baluchistan and Sindh. 

But Islamabad was unable to proceed with the project due to sanctions and financing challenges, despite pledges made in two agreements it had signed in 2009 and 2019. Islamabad was due to complete its section of the pipeline in February-March of this year, or else face a hefty penalty of $18 billion to be paid to Iran. But Tehran has given Islamabad until September 2024 to complete the nearly 500-mile section on Pakistan’s side.