Pakistan to build gas pipeline from Iran.

^{Photo: Bloomberg}

Pakistan is actively advancing plans to construct a vital natural gas pipeline from Iran, a strategic move driven by the country's pressing energy needs. The Cabinet Committee on Energy has granted approval to initiate the construction of an 80-kilometer segment, marking a significant step in the overall 800-kilometer pipeline project. Notably, this section will extend from the Iranian border to Pakistan's key port city of Gwadar.

Funding for this particular segment will be facilitated by the Pakistani government, signaling a determined commitment to the project. This move comes after years of hesitation on Pakistan's part, primarily due to investor reluctance attributed to United Nations sanctions against Iran and constraints related to dollar transactions.

The backdrop of this development includes a 25-year gas deal signed between Pakistan and Iran in 2013. However, progress had been sluggish, with reluctance from investors hampering the project's advancement. The decision to use government funds for the initial segment reflects Pakistan's resolve to move forward with the pipeline despite international sanctions.

This move, however, may potentially strain Pakistan's relations with its western allies, given the geopolitical context and ongoing global dynamics. Traditionally maintaining close ties with both the United States and Iran, Pakistan is now navigating a delicate balance between its energy requirements and international diplomatic considerations.

Pakistan's justification for the pipeline project revolves around the urgent need to secure sufficient gas supplies for its industrial sector, particularly as domestic resources are depleting rapidly. Currently, the share of imported liquefied natural gas in Pakistan's total supply has risen to 29%, underscoring the significance of this new pipeline for the nation's energy security.

While the 25-year gas deal signed in 2013 serves as the foundation for this infrastructure project, the decision to move forward with construction and allocate government funds for the initial segment highlights Pakistan's strategic priorities in addressing its energy challenges, despite potential geopolitical ramifications.