Despite facing opposition from the United States, Iran and Pakistan are pushing forward with plans to finalize the initial 80-kilometer stretch of the Iran-Pakistan gas pipeline. This pipeline segment will extend from Gwadar to the Iranian border and is set to be completed during the upcoming visit of Iranian President Ebrahim Raisi. However, the project is not without its challenges. Failure to proceed with the construction could result in a significant penalty of $18 billion. To avoid this penalty, both countries are determined to move forward with the project. Iran has extended the deadline for completion until September 2024, and if Pakistan fails to act, the matter may proceed to arbitration.

The Pakistani cabinet has already granted approval for the project, and efforts are underway to secure funding from the Gas Infrastructure Development Cess. Initially, Pakistan aims to import 100 million cubic feet per day (mmcfd) of natural gas through the pipeline. However, there is potential for this volume to increase to 750 mmcfd if the full 781-kilometer pipeline extending to Nawabshah is completed as planned. Despite geopolitical challenges and opposition, both Iran and Pakistan are committed to advancing this critical energy infrastructure project, which holds the promise of bolstering bilateral ties and addressing Pakistan’s energy needs.