Pakistan has begun construction on Pakistan-Iran gas pipeline

Preparations for the upcoming visit of Iranian President Ebrahim Raisi to Pakistan on April 22 have prompted notable actions, particularly the commencement of work on an 80-kilometer section of the Pakistan-Iran gas pipeline from Gwadar to a point where it can connect with the Iranian counterpart. This demonstrates the commitment of both nations to advancing this crucial energy infrastructure despite facing significant challenges.

The Inter-State Gas Company (ISGS) has proactively taken steps by inviting tenders from consultants to re-validate surveys and conduct Front-End Engineering Design (FEED). These measures are crucial as the project has experienced considerable delays, partly due to explicit opposition from the United States, including threats of sanctions. Tehran’s issuance of a final notice to Islamabad in January further emphasizes the urgency of completing Pakistan’s side of the pipeline by February-March 2024 to avoid an $18 billion penalty stipulated in the Gas Sales Purchase Agreement (GSPA). Therefore, the current emphasis on laying down the 80-kilometer pipeline section is crucial to circumvent arbitration and potential penalties.

The initial capacity of this pipeline segment to accommodate 100mmcfd is significant, considering the project’s expected capacity of 750mmcfd over 25 years. However, the completion of this segment is not only essential for meeting immediate energy needs but also symbolizes the enduring partnership between Iran and Pakistan amid geopolitical challenges.

Leave a Reply

Your email address will not be published.