Pakistan

Defence minister confident in Iran-Pak gas pipeline completion despite US warning

Defence Minister Khawaja Asif has expressed optimism about the completion of the Iran-Pakistan gas pipeline project despite facing current obstacles. Speaking with a local news outlet, he emphasized the necessity for regional stakeholders to unite in safeguarding their interests amidst regional turmoil and external interventions by major powers, particularly referencing Israel.

Asif hailed Iranian President Seyyed Ebrahim Raisi’s recent visit as a significant step forward, particularly for the stalled pipeline project, which has been hindered by geopolitical tensions and international sanctions. His remarks come at a crucial juncture, as the United States has hinted at the possibility of imposing sanctions due to business dealings between Iran and Pakistan following President Raisi’s visit.

iran pak gas pipeline

The minister criticized the double standards of Western nations regarding Israel’s actions compared to other countries and stressed the common threat of terrorism faced by Iran and Pakistan, advocating for joint efforts to combat it. Asif reaffirmed the strong historical ties between Pakistan and Iran, noting security concerns that prevented a larger meeting during President Raisi’s visit.

These statements are significant in light of a recent joint statement by the Foreign Office outlining agreements between Iran and Pakistan on energy cooperation, including the pipeline project, amidst US advisories against dealing with Iran due to potential sanctions.

Iran-Pak gas pipeline project

The agreement signed in 2010 aimed to provide Pakistan with 750 million to a billion cubic feet of natural gas daily for 25 years from Iran’s South Pars gas field, addressing Pakistan’s increasing energy demands. The pipeline was planned to span 1,900 kilometers, with 1,150 km in Iran and 781 km in Pakistan.

Iran invested $2 billion in constructing its part of the pipeline, readying it for export. However, Pakistan postponed construction, citing international sanctions on Iran. Despite Iran fulfilling its commitments, Pakistan put the project on hold, leading to discussions for a 10-year extension in 2014, set to expire in September this year.

iran pak gas pipeline

Failure to comply could result in Iran pursuing legal action, potentially imposing fines of up to $18 billion on Pakistan. To mitigate this risk, Pakistan’s interim government earlier this year approved preliminary plans to construct an 80 km segment of the pipeline.

In March, Islamabad announced intentions to seek a US sanctions waiver for the project, yet the US publicly voiced opposition, cautioning about the sanctions risks associated with dealings with Tehran. Washington’s support is pivotal for Pakistan as it seeks a new IMF bailout program.

Pakistan, heavily reliant on natural gas for domestic and industrial needs, faces urgent demand for affordable gas as its reserves decline rapidly and LNG deals become costly amid high inflation. Despite Iran possessing the world’s second-largest gas reserves, obstacles such as Western sanctions, political instability, and construction delays hinder its progress as an exporter.

Originally planned to extend to India, the project saw Delhi withdrawing its participation later on.

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