The Iran-Pakistan gas pipeline, also known as the Peace Pipeline, witnesses the ongoing challenges of geopolitical tensions and international sanctions. Despite initial promises of energy cooperation, the project has encountered numerous setbacks, leaving it mired in uncertainty.
Iran-Pakistan Gas Pipeline Progress: Delayed Commitments and Geopolitical Pressures
Signed in 2010, the pipeline deal aimed to address Pakistan’s energy demands by supplying natural gas from Iran’s South Pars gas field. However, while Tehran diligently invested $2 billion for its construction, Pakistan hesitated to commence work, citing international sanctions as a barrier. As the deadline for construction looms, Pakistan faces the prospect of notable fines, potentially amounting to $18 billion, for its delayed obligations.
Despite tentative steps toward progress, the pipeline project remains ensnared in a web of geopolitical complexities. Pakistan’s caretaker administration recently signaled a willingness to proceed with a segment of the pipeline, only to face pushback from the United States, a key ally. Washington’s reluctance to support the project poses a big obstacle for Pakistan, particularly as it negotiates an IMF bailout program.
Energy Security Concerns
Pakistan’s urgent need for affordable energy highlights the importance of the Iran-Pakistan gas pipeline; with domestic and industrial users heavily reliant on natural gas, the country’s reserves dwindling, and LNG deals proving costly amidst inflationary pressures, the pipeline represents a critical lifeline. However, the project’s stalled progress threatens to exacerbate Pakistan’s energy woes, highlighting the urgent need for diplomatic resolutions and international cooperation.
Here are some lesser-known facts:
- According to BP’s Statistical Review of World Energy, Iran holds the world’s second-largest gas reserves, trailing only behind Russia. However, Western sanctions, political instability, and delays in construction have hindered its progress as an exporter.
- In March, Islamabad announced its intention to pursue a waiver from US sanctions for the pipeline project. However, the US expressed its lack of support for the project, warning of the potential consequences of engaging in business with Tehran.
- The agreement initially included plans to extend the pipeline to India. However, Delhi later withdrew from the project.
Read more: Iran’s President Set to Visit Pakistan to Mend Ties
