Pakistan-Iran Gas Pipeline: Unpacking The Energy Lifeline

Curt Torp 20 Jun 2025

The Pak Iran Gas Pipeline Project, often referred to as the "Peace Pipeline," stands as a monumental, yet perennially challenged, endeavor aimed at connecting two neighboring nations through a vital energy artery. Designed to transport natural gas from Iran's vast reserves to energy-starved Pakistan, this ambitious undertaking has been mired in geopolitical complexities, financial hurdles, and significant delays since its inception. Despite these formidable obstacles, recent developments in 2024 have reignited hope, signaling a renewed determination from Pakistan to push forward with a project deemed critical for its long-term energy security.

This article delves deep into the intricate history, the immense potential, and the persistent challenges surrounding the Pak Iran Gas Pipeline Project. We will explore Iran's pivotal role as a gas supplier, Pakistan's dire need for energy, the diplomatic tightrope walk necessitated by international sanctions, and the concrete steps being taken to finally bring this decades-long vision to fruition. Understanding this project is crucial for grasping the evolving energy dynamics and geopolitical landscape of South Asia.

Introduction to the Pak Iran Gas Pipeline Project
A Decade of Delays: Unpacking the Project's History
- From Conception to Approval: A Timeline of the Pak Iran Gas Pipeline
Iran's Energy Powerhouse: The Supply Side of the Equation
- The South Pars Field: A Pillar of Global Gas Reserves
Pakistan's Urgent Energy Needs: Why This Pipeline is a Lifeline
Navigating Geopolitical Headwinds: Sanctions and Diplomacy
- Seeking Sanctions Waivers: Pakistan's Diplomatic Balancing Act
The Road Ahead: Construction, Funding, and Future Prospects
- Gwadar's Role: A Strategic Gateway for Energy
The Broader Implications: Regional Connectivity and Energy Security
Conclusion: A Pipeline to Prosperity or Continued Uncertainty?

Introduction to the Pak Iran Gas Pipeline Project

The Pak Iran Gas Pipeline Project, officially initiated with construction beginning in 2011, represents a critical infrastructure development that holds immense promise for Pakistan's energy landscape. Envisioned as a direct conduit for natural gas from Iran, this project has been heralded by many professionals as an "energy lifeline" for Pakistan. Its fundamental purpose is to alleviate Pakistan's chronic energy shortages, which have long hampered industrial growth, economic stability, and the daily lives of its citizens. The concept is straightforward: tap into Iran's colossal natural gas reserves and deliver this much-needed fuel directly to Pakistani consumers and industries. However, the path to realizing this vision has been anything but simple, marked by a decade of postponements and complex geopolitical maneuvers. The recent official approval by the Pakistani government in 2024 for a crucial section of the pipeline marks a significant turning point, underscoring a renewed commitment to overcome past hurdles and prioritize national energy security.

This project is not merely about laying pipes; it is about forging energy independence, fostering regional cooperation, and navigating the intricate web of international relations. The sheer scale of the endeavor, combined with the strategic importance of natural gas as a cleaner and more efficient fuel source, places the Pak Iran Gas Pipeline Project at the forefront of regional development discussions. As Pakistan grapples with persistent energy deficits, the successful completion of this pipeline could unlock immense economic potential, reduce reliance on volatile international energy markets, and provide a stable foundation for future growth.

A Decade of Delays: Unpacking the Project's History

The journey of the Pak Iran Gas Pipeline Project is a testament to perseverance in the face of daunting challenges. While construction on the Iranian side commenced in 2011, signaling an initial commitment, the project quickly encountered significant headwinds. What was initially conceived as a straightforward energy deal between two neighbors soon became entangled in a complex web of international sanctions, primarily those imposed by the United States on Iran. These sanctions created an environment of extreme caution, making it exceedingly difficult for Pakistan to secure the necessary financing, technology, and international partners without risking punitive measures. Consequently, despite the visible progress on the Iranian side, as evidenced by Iranian welders working on the pipeline in Chabahar near the Pakistani border in a 2013 file photo, the Pakistani segment remained largely dormant.

The period from 2013 onwards was characterized by a prolonged stalemate. Each year brought fresh hopes and renewed discussions, yet concrete action on Pakistan's part remained elusive. The financial implications of potential sanctions, coupled with the political sensitivity of engaging with Iran under such circumstances, led to approximately ten years of postponement. This delay not only stalled a vital energy project but also highlighted the immense pressure Pakistan faced from external powers. The continuous deferrals underscored the delicate balance Pakistan had to maintain between its national energy interests and its international diplomatic relationships.

From Conception to Approval: A Timeline of the Pak Iran Gas Pipeline

**Early 2000s:** Initial discussions and conceptualization of a gas pipeline connecting Iran and Pakistan, sometimes extending to India (IP Gas Pipeline).
**2010:** Bilateral agreements signed between Iran and Pakistan for the pipeline.
**2011:** Construction officially begins on the Iranian side of the pipeline. Workers are seen busy on the pipeline near Chabahar, Iran.
**2013:** Iranian welders are photographed working on the pipeline near the Pakistani border, signifying significant progress on Iran's end.
**2014 onwards:** Project faces severe delays on the Pakistani side due to concerns over international sanctions against Iran.
**2015:** Iran Nuclear Deal (JCPOA) offers a brief window of opportunity, but sanctions are reimposed later, complicating matters again.
**Approximately 10 years of postponement:** The project remains largely stalled on Pakistan's end, despite continuous diplomatic efforts and internal debates.
**2024:** The Pakistani government officially approves the construction of its section of the pipeline, marking a pivotal moment after a decade of delays. This decision, as reported by IRNA news agency, is set to enhance the nation’s energy security.
**April 2024:** Iranian President Ebrahim Raisi's visit to Pakistan puts the spotlight back on the major gas pipeline deal, signaling renewed political will from both sides.

Iran's Energy Powerhouse: The Supply Side of the Equation

Iran stands as a global energy titan, boasting the world's second-largest proven natural gas reserves. As of December 2021, these reserves were estimated at a staggering 1,203 trillion cubic feet (tcf), a figure surpassed only by Russia. This immense natural wealth positions Iran as a crucial potential supplier for energy-deficient nations in the region and beyond. The primary source for the Pak Iran Gas Pipeline Project is envisioned to be Iran's South Pars gas field, a supergiant natural gas condensate field located in the Persian Gulf. This field is a cornerstone of Iran's energy infrastructure and one of the largest natural gas fields in the world, capable of sustaining long-term, high-volume exports.

The technical expertise and infrastructure required to extract and transport such vast quantities of gas are well-established in Iran. Images of Iranian welders diligently working on the pipeline near Chabahar in 2013 underscore the country's commitment and capability to fulfill its part of the agreement. For Iran, the Pak Iran Gas Pipeline Project represents not just an economic opportunity but also a strategic imperative to diversify its export markets and strengthen regional ties. Iranian officials, such as Consul General to Pakistan Hassan Nourian, have consistently reiterated Iran's readiness and desire to complete the project, emphasizing that Iran perceives "political determination from Pakistan to complete the project." This consistent stance from Tehran highlights their long-standing commitment to the deal, viewing it as a mutually beneficial venture.

The South Pars Field: A Pillar of Global Gas Reserves

The South Pars/North Dome field, shared between Iran and Qatar, is the world's largest gas field, holding an estimated 51 trillion cubic meters of in-situ gas and 50 billion barrels of condensate. Iran's portion, South Pars, is crucial for its domestic consumption and export ambitions. The sheer scale of this field ensures a reliable and abundant supply of natural gas for decades to come, making it an ideal source for large-scale export projects like the Pak Iran Gas Pipeline. The gas extracted from South Pars is of high quality, suitable for direct pipeline transport, and can significantly contribute to Pakistan's energy mix, particularly for power generation, industrial use, and even domestic heating. The long-term viability of the supply from South Pars provides Pakistan with the assurance of a consistent and substantial energy source, which is a key factor in its energy security strategy.

Pakistan's Urgent Energy Needs: Why This Pipeline is a Lifeline

Pakistan faces a severe and persistent energy crisis that has profound implications for its economy and society. Chronic power outages, soaring energy import bills, and an over-reliance on expensive and often volatile sources like imported furnace oil and LNG have crippled industries, stifled economic growth, and caused widespread public discontent. The energy deficit is a fundamental impediment to Pakistan's development trajectory, making the search for reliable, affordable, and sustainable energy sources a national imperative. In this context, the Pak Iran Gas Pipeline Project is not just another infrastructure project; it is viewed by a large number of professionals as an "energy lifeline" for Pakistan.

Natural gas is a cleaner-burning fossil fuel compared to oil and coal, making it an attractive option for power generation and industrial feedstock. A stable supply of natural gas from Iran would offer several critical benefits to Pakistan:

**Enhanced Energy Security:** Diversifying energy sources and reducing reliance on volatile global markets.
**Cost-Effectiveness:** Potentially providing gas at a more stable and competitive price compared to LNG imports, which are subject to global price fluctuations.
**Industrial Growth:** Providing consistent and affordable energy for industries, boosting manufacturing, and creating jobs.
**Reduced Load Shedding:** Alleviating power shortages and improving the quality of life for citizens.
**Environmental Benefits:** Supporting a transition towards cleaner energy sources, albeit still fossil fuels, compared to heavy fuel oil.

Driven by this undeniable necessity and bolstered by the current global environment, which has seen energy prices surge and supply chains become increasingly vulnerable, Pakistan has set its sights firmly on advancing this project. The urgency stems from a recognition that long-term energy stability is paramount for economic resilience and national development.

Navigating Geopolitical Headwinds: Sanctions and Diplomacy

The most significant hurdle for the Pak Iran Gas Pipeline Project has been, and continues to be, the complex web of international sanctions imposed on Iran, primarily by the United States. These sanctions, targeting Iran's energy sector and financial transactions, have created a precarious situation for any country seeking to engage in large-scale energy projects with Tehran. Pakistan, a close ally of the United States, has found itself in a delicate balancing act, torn between its dire energy needs and the potential repercussions of violating international sanctions. The threat of secondary sanctions, which could penalize Pakistani entities or individuals for doing business with Iran, has been a major deterrent, contributing directly to the decade-long postponement of the project's Pakistani segment.

Despite these pressures, the recent visit of Iranian President Ebrahim Raisi to Pakistan in April 2024 brought the spotlight back on this major gas pipeline deal. This high-level engagement underscored the mutual desire of both neighbors to overcome the geopolitical issues that have plagued the project. Iranian Consul General Hassan Nourian explicitly stated that the project was stalled "due to sanctions concerns," acknowledging the primary obstacle. However, his remarks also highlighted Iran's belief in Pakistan's "political determination" to complete the project, suggesting a shift in Islamabad's approach. This renewed determination signals a strategic pivot, where Pakistan is increasingly prioritizing its national energy security over the fear of potential international repercussions, or at least seeking to mitigate them proactively.

Seeking Sanctions Waivers: Pakistan's Diplomatic Balancing Act

Recognizing the potential for conflict with existing international sanctions, Pakistan is expected to intensify diplomatic efforts to seek an exemption from U.S. sanctions. This is a crucial aspect of Pakistan's strategy to move forward with the Pak Iran Gas Pipeline Project. Such an exemption, if granted, would provide the necessary legal and financial cover for Pakistani entities to engage in the construction and operation of the pipeline without fear of punitive measures. The diplomatic offensive would likely involve presenting a compelling case to Washington, emphasizing Pakistan's critical energy needs, the humanitarian implications of its energy crisis, and the strategic importance of regional energy stability.

However, securing such a waiver is a formidable challenge, given the current geopolitical climate and the ongoing tensions surrounding Iran's nuclear program and regional activities. Pakistan's diplomatic corps will need to leverage its strategic relationship with the U.S. while simultaneously demonstrating its commitment to international norms and non-proliferation. The success of these diplomatic efforts will largely determine the pace and ultimate completion of the Pak Iran Gas Pipeline Project, making it a pivotal element in the project's future.

The Road Ahead: Construction, Funding, and Future Prospects

The official approval by Pakistan's Cabinet Committee on Energy (CCOE)/Cabinet in 2024 marks a significant leap forward for the Pak Iran Gas Pipeline Project. This decision greenlights the construction of a crucial 80km section of the pipeline within Pakistan, extending from the Iranian border to Gwadar. This initial phase is strategically important, as it connects the pipeline to a major port city that is rapidly developing into a regional energy hub. The execution of this project falls under the purview of Inter State Gas Systems (ISGS), a Pakistani state-owned entity responsible for gas transmission infrastructure. This domestic execution strategy aims to mitigate some of the international financing challenges that have plagued the project in the past.

A critical aspect of the renewed push is the funding mechanism. The approved work is slated to be funded from the Gas Infrastructure Development (GID) fund. This is a dedicated fund in Pakistan established to finance gas infrastructure projects, often collected through a levy on gas consumers. Utilizing domestic funding sources like the GID fund is a pragmatic approach to bypass international financial restrictions and sanctions concerns, demonstrating Pakistan's commitment to self-reliance in this critical venture. While the 80km section is just a fraction of the total length required to connect to Pakistan's national grid, its commencement is a powerful signal of intent. Project development activities are now in progress, indicating that this is not merely a political statement but a tangible step towards implementation.

The focus on the Gwadar section first suggests a phased approach, possibly allowing Pakistan to gain experience and build confidence before tackling the more extensive and potentially more challenging segments. This incremental strategy could also provide more time for diplomatic efforts to secure sanctions waivers or for the broader geopolitical landscape to evolve favorably. The successful completion of this initial phase will be crucial in demonstrating Pakistan's capability and commitment, potentially attracting further investment or easing international concerns for subsequent phases of the Pak Iran Gas Pipeline Project.

Gwadar's Role: A Strategic Gateway for Energy

Gwadar, a deep-sea port city in Balochistan, holds immense strategic importance for Pakistan's energy future. Its geographical location at the mouth of the Persian Gulf makes it an ideal point for receiving energy imports. By connecting the Pak Iran Gas Pipeline directly to Gwadar, Pakistan aims to transform the city into a major energy hub, not just for gas but potentially for other energy resources as well. The development of Gwadar as part of the China-Pakistan Economic Corridor (CPEC) further amplifies its significance. A reliable supply of natural gas via the pipeline could fuel industrial zones and power plants in Gwadar and its surrounding areas, contributing significantly to regional economic development and potentially serving as a distribution point for other parts of Pakistan. This strategic integration underscores the multi-faceted benefits Pakistan seeks to derive from the Pak Iran Gas Pipeline Project.

The Broader Implications: Regional Connectivity and Energy Security

The completion of the Pak Iran Gas Pipeline Project extends far beyond the immediate energy needs of Pakistan. It carries profound implications for regional connectivity, economic integration, and the broader geopolitical balance in South Asia. A functioning pipeline would solidify energy ties between Iran and Pakistan, fostering greater interdependence and potentially enhancing bilateral relations across various sectors. This energy corridor could also pave the way for future regional energy projects, creating a more interconnected and stable energy market in the region. The project's success could serve as a blueprint for other cross-border infrastructure initiatives, demonstrating the potential for cooperation even amidst complex geopolitical environments.

Furthermore, the Pak Iran Gas Pipeline Project contributes significantly to Pakistan's long-term energy security strategy. By diversifying its energy import portfolio away from exclusive reliance on LNG and oil, Pakistan can insulate itself from global price volatility and supply disruptions. This diversification is crucial for a country with a rapidly growing population and increasing energy demands. The pipeline offers a direct, land-based supply route, reducing reliance on sea lanes that can be vulnerable to geopolitical tensions. This strategic advantage enhances Pakistan's resilience in the face of global energy shocks and provides a more predictable energy future. The project, therefore, is not just about gas; it's about national resilience, economic stability, and strategic autonomy in a turbulent world.

The project also has the potential to influence regional power dynamics. A successful Pak Iran Gas Pipeline Project could strengthen Pakistan's position as a key transit country for energy, potentially opening avenues for further energy trade with other Central Asian or South Asian nations in the future. This regional connectivity aspect aligns with broader visions of economic corridors and infrastructure development that aim to unlock the full potential of the Eurasian landmass. The commitment shown by both Iran and Pakistan, despite persistent challenges, highlights the strategic value they attach to this project as a cornerstone of their long-term energy and economic policies.

Conclusion: A Pipeline to Prosperity or Continued Uncertainty?

The Pak Iran Gas Pipeline Project, a vision for energy security and regional cooperation, has navigated over a decade of delays, primarily due to geopolitical complexities and international sanctions. From its construction beginning in 2011 to the significant official approval by Pakistan in 2024, the journey has been arduous. Iran, with its vast natural gas reserves, particularly from the South Pars field, remains a willing and capable supplier. For Pakistan, the pipeline is unequivocally an "energy lifeline," crucial for addressing its chronic power shortages, fostering industrial growth, and enhancing overall energy security. The recent visit of Iranian President Ebrahim Raisi and the subsequent approval of the 80km section from the border to Gwadar, funded by the Gas Infrastructure Development fund and executed by Inter State Gas Systems, underscore a renewed political determination.

However, the path forward for the Pak Iran Gas Pipeline Project remains fraught with challenges, particularly the need for Pakistan to intensify diplomatic efforts to seek an exemption from U.S. sanctions. While the initial phase of construction marks a tangible step, the broader completion of the pipeline hinges on navigating these intricate geopolitical currents. The project's success will not only transform Pakistan's energy landscape but also have significant implications for regional connectivity and the broader energy market. It stands as a testament to the complex interplay of national needs, economic imperatives, and international politics.

As this vital project moves forward, its progress will be closely watched by regional and international observers. Will the Pak Iran Gas Pipeline truly become a pipeline to prosperity for Pakistan, finally delivering on its promise of stable and affordable energy? Or will it remain a symbol of continued uncertainty, perpetually caught in the crosscurrents of global power dynamics? The coming years will undoubtedly provide the answer. We invite our readers to share their thoughts on the implications of this project in the comments below. Do you believe Pakistan can successfully navigate the sanctions? What are the long-term benefits or risks you foresee? Share this article to spark further discussion on this critical regional development!

China to Build Pipeline From Iran to Pakistan - WSJ

Pak-Iran Gas Pipeline Project to be formally inaugurated on Monday

Pakistan, Iran explore ways to complete gas pipeline project - EasternEye

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