The outgoing interim federal cabinet approved the commencement of the first phase of the Iran-Pakistan (IP) gas pipeline project, spanning 80 kilometres within Pakistani territory, with an allocation of $158 million (Rs44.2 billion) for its construction.
The first phase, extending from the Iranian border to Gwadar, is slated for completion within a year and is funded by the Gas Infrastructure Development Cess (GIDC).
The approval follows the Cabinet Committee on Energy’s endorsement, based on recommendations from the Ministerial Oversight Committee established by Prime Minister Shehbaz Sharif in January 2023 and later revised in September. This committee, focusing on the project’s economic feasibility and financing, secured a legal waiver and guidance from Willkie Farr & Gallagher LLP.
This initiative marks a crucial step toward fulfilling a bilateral agreement with Iran, which has set a September 2024 deadline for the project’s completion to avoid potential international arbitration for contract breach. As Senator Muhammad Abdul Qadir indicated, formal discussions between the two nations are expected to begin shortly.
Despite the project’s importance for energy security, it has encountered delays, primarily due to concerns over possible U.S. sanctions against Iran. While Iran has completed its pipeline portion, Pakistan’s progress has been slower, highlighting the complexities of international agreements and sanctions.
 gas pipeline project, allocating $158 million for construction from the Iranian border to Gwadar. This move aims to fulfill a crucial bilateral agreement with Iran and avoid international arbitration, with completion targeted within a year.){kind=link}