THE Iran-Pakistan natural gas pipeline — a project decades in the making — is once again in the news. Lawmakers questioned the status of the stalled scheme in the Senate on Tuesday. As per the petroleum minister, the prime minister has formed a committee to find a “mutually acceptable” solution. It should be remembered that Iran has initiated arbitration proceedings in France, and Pakistan risks paying billions in penalty for not implementing the intergovernmental agreement. Pakistan’s dilemma is genuine: the country is stuck between arbitration and hefty penalties if it abandons the project, and potentially ‘secondary sanctions’ by the US if it goes ahead with it. However, considering that Iran completed its part of the pipeline in 2011, and the grace period provided to Pakistan to build its part expired in 2024, a solution should have already been found.
Pakistan needs gas, and a steady supply from its western neighbour could address the shortages it faces. However, the issue here is more than one of logistics, project funding or gas pricing. It has fundamentally become a geopolitical concern, with the potential to spoil Pakistan-Iran relations unless handled carefully. On the other hand, American threats of sanctions cannot be ignored, keeping in mind Pakistan’s fragile economic situation. Instead of kicking the issue into the long grass, and waiting for a potentially adverse and expensive arbitration decision, Pakistan must address the pipeline question proactively. A comprehensive legal approach is required that protects national interests, while also maintaining a balance in ties with Iran and the US. One option would be to talk to the US and explain that any decision on the pipeline is best guided by Pakistan’s own economic interests. The Trump administration holds the current ruling set-up in Pakistan in high esteem and this aspect, coupled with Islamabad’s role as a mediator in the US-Iran conflict, can be leveraged to soften the American stance towards the project. Abandoning the pipeline would send the wrong message. The Iranians should also be kept in the loop to find a mutually beneficial way out. The destructive American and Israeli wars in the region will end one day. But Pakistan and its neighbours cannot change their geography, and must work to enhance friendship and trust.
