Caretaker government approves construction of gas pipeline from Iran to Gwadar

ISLAMABAD: The caretaker government on Monday gave the green light for the construction of a crucial gas pipeline from the Iranian border to Gwadar to address the country’s chronic energy shortages.

The approval was granted by the caretaker cabinet and marks a step towards the implementation of the Iran-Pakistan gas pipeline project, which has long seen delays since 2013.

The decision to proceed with the construction of an 81-kilometer (km) gas pipeline was endorsed by the caretaker cabinet following approval from the Cabinet Committee on Energy.

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This will allow the transportation of 750 million cubic feet of gas from Iran to Gwadar, providing a cheaper alternative to liquefied natural gas (LNG) imports for the cash-strapped Pakistan.

The approval is also expected to shield Pakistan from potential fines amounting to $18 billion due to delay in finishing the project. This will enable substantial annual savings for Pakistan through the procurement of gas from Iran at a more affordable rate.

Despite the threat of crippling sanctions by the United States (US) on Iran, Pakistan decided to go ahead with the gas pipeline project. It is also working on legal and diplomatic efforts to bypass the sanctions for the pipeline project.

Meanwhile, the outgoing federal cabinet has also given its approval for the completion of the first phase of the gas pipeline project within Pakistan’s territory. With an estimated cost of $158 million, the construction of an 81-km part of the pipeline is set to start soon.

The project picked up pace when the Cabinet Committee on Energy recently approved the construction of the pipeline in Pakistan’s territory.

The establishment of a Ministerial Oversight Committee (MOC) also streamlined the decision-making process.

While the Iranian section of the pipeline has been completed, the construction of the Pakistani segment encountered delays amidst uncertainties.

Iran has granted Pakistan until September 2024 to complete the construction of the pipeline.

On a question regarding Pakistan’s plans to construct the pipeline, the United States Department of State Spokesperson Matthew Miller opted not to provide an answer.