ISLAMABAD — Pakistan has revived hopes of completing the long-dormant Iran-Pakistan (IP) gas pipeline, with Defence Minister Khawaja Asif signalling that gas and oil could once again flow across the western border as a thaw between Washington and Tehran reopens an energy window shut for more than a decade.
“We can have a gas pipeline from Iran, and oil can also be imported,” Asif said, arguing that overland routes would cut costs for both countries, according to Muslim Network TV. He described trade with Iran as “a win-win situation for everyone,” pointing to benefits for communities in Balochistan. The remarks followed a Memorandum of Understanding signed during Iranian President Masoud Pezeshkian’s state visit, which has injected fresh momentum into the stalled scheme, the outlet reported.
Under the 2009 agreement, Iran is to supply Pakistan up to one billion cubic feet of natural gas per day over a 25-year period, Muslim Network TV noted. Iran completed construction of its section years ago, but Pakistan has yet to finish its portion, with the delay attributed to sanctions-related concerns and financing difficulties, the report said.
The renewed optimism rests on shifting geopolitics. Business leaders have urged Islamabad to seize the moment created by recent US-Iran diplomatic engagement, with Businessmen Panel chairman and former FPCCI president Mian Anjum Nisar arguing that a relaxation of sanctions would allow construction to proceed without triggering international penalties, The Nation reported. Nisar said the project “offers Pakistan a reliable, cost-effective, and long-term energy solution,” adding that “energy security is national security,” according to the paper. Pakistan imports roughly 85 percent of its oil requirements and about half its gas needs through costly LNG, The Nation noted, underscoring the case for a stable overland supply.
The revival push unfolds against a heavy legal backdrop. Iran initiated arbitration proceedings against Pakistan in September 2024 before a Paris-based court of arbitration under French law, seeking damages of $18 billion under the Gas Sales Purchase Agreement for the unbuilt segment, The News reported. Islamabad has sought a fresh 10-year extension, until 2035, to implement the project, citing intensified US sanctions on Tehran as the key constraint on construction, the paper said.
A Ministerial Oversight Committee headed by Deputy Prime Minister and Foreign Minister Senator Ishaq Dar is examining options to limit Pakistan’s financial exposure while pursuing an out-of-court settlement, The News reported. Petroleum Minister Ali Pervaiz Malik said the committee “was exploring various options,” with “no concrete breakthrough on the diplomatic front so far, but the legal proceedings are ongoing,” according to the paper. A verdict in the arbitration is expected in 2027 or 2028, The News added.
For now, the gap between political optimism and physical progress remains wide. While the MoU and Asif’s comments have rekindled momentum, Muslim Network TV reported, Pakistan’s section of the pipeline is still unbuilt, and any decision to break ground will hinge on how far and how fast international sanctions relief on Tehran actually materialises. Until then, Islamabad continues to defend itself in Paris even as it courts the prospect of finally completing the so-called Peace Pipeline.
