Reviving Pakistan-Iran energy lifeline
PAKISTAN’S economic quagmire can be attributed, in no small part, to the crippling costs of energy—be it electricity, gas or petrol.
In stark contrast, our neighbouring Muslim ally, Iran, is blessed with vast reserves of oil and natural gas. Back in 2010, in what appeared to be a promising move, Pakistan and Iran inked an agreement to construct a nearly 1,900-kilometer-long gas pipeline, connecting Iran’s South Pars Gas Field to the energy-starved regions of Balochistan and Sindh in Pakistan.
The project was slated to supply an impressive 750 million to 1 billion cubic feet of natural gas per day for 25 years, with the potential to significantly mitigate Pakistan’s mounting energy crisis.
However, due to the weight of U.S. sanctions on Iran, this pivotal project has languished in limbo for more than a decade.
Iran, despite international pressures, has fulfilled its part of the deal, completing its section of the pipeline at a cost of $2 billion.
In contrast, Pakistan has failed to make any meaningful progress on its side, leading to frustration and growing impatience on Iran’s part.
In a recent interview, Iran’s ambassador to Pakistan, Reza Amiri Moghadam, underscored that the timeline for this project cannot be extended further. He reiterated that the Iranian oil company seeks to resolve this deadlock through constructive dialogue. Iran’s warnings should not be taken lightly—Tehran has already hinted at approaching the International Court of Arbitration in Paris, with the possibility of an $18 billion claim against Pakistan for non-compliance.
In fact, on February 23, Pakistan’s Cabinet Committee on Energy merely approved the construction of an 80-kilometer segment of the pipeline—a tepid response given the urgency of the situation.
Analysts rightfully argue that Pakistan’s lacklustre response leaves Iran with every justification to escalate the matter legally. Such negligence, especially on a project of this magnitude, is not only irresponsible but also perilously short-sighted.
The completion of the Pakistan-Iran gas pipeline is not merely an infrastructural endeavour; it is a strategic imperative that has the potential to reshape Pakistan’s economic landscape. The importance of addressing Pakistan’s severe energy crisis through a reliable and cost-effective supply of natural gas cannot be overstated. The government must move beyond lip service and embrace tangible, actionable steps to fulfil its part of the bargain.
Engaging diplomatically with Iran to resolve the deadlock is imperative, as allowing this matter to devolve into international litigation could result in crippling economic penalties and further deteriorate Pakistan’s already fragile fiscal state.
This pipeline project stands as a beacon of hope—a venture that could alleviate Pakistan’s energy woes and provide a semblance of economic stability.
However, inaction, complacency and a lack of political will are the gravest threats to this prospect. It is imperative that the government recognizes the gravity of the situation and takes decisive action to revive the project without further delay.
The broader national interest demands no less. The successful completion of this pipeline would not only ensure a much-needed boost to Pakistan’s energy reserves but also solidify bilateral relations with Iran, setting the stage for enhanced regional cooperation and stability.
The stakes are too high for Pakistan to treat this matter with the same indifference that has characterized its approach for the past decade. The time for complacency has long passed—Pakistan must either rise to the occasion or face the repercussions of its failure on the global stage.
