The Iran-Pakistan Gas pipeline(IP) was originally launched as Iran-Pakistan-India Gas Pipeline(IPI). It was supposed to extend across these three territories creating economic connectivity between them. This proposal originally took place in 1994 with India withdrawing from it in 2008. With increasing sanctions on Iran and India’s geopolitical position at the time, they had to remove themselves. In March of 2010, India and Pakistan officially consented to the project in Ankara.
This agreement entailed that a specific length of pipeline would be constructed by each country on their respective territories until 2014 which will then be connected. Pakistan officially began construction of their side of 780km in March 2013. The Iranian section extends 1,100km and up until now, Iran has invested over $2.0 Billion. While Pakistan was expected to complete its construction till start of 2024. Despite sanctions from the US, in March Mumtaz Zahra Baloch stated that the project is continuing “in conformity with our commitment to the Iran-Pakistan pipeline.” Pakistan has further been granted an extension of 180 days until September 2024. The extension is essentially given to navigate through the intricacies of the geopolitical factors affecting the progress of this project. Ebrahim Raisi’s death in the unexpected helicopter crash yet again puts the completion of this project in doubt.
Benefits to Pakistan upon Completion
For Pakistan, it is estimated that the completion would cost $3Billion and reduce oil imports by $5.3 billion. This will help Pakistan in buying oil for another $2.3 billion, thus national saving and huge economic benefit. Other than this, Pakistan is considered as an energy deprived country. This pipeline can assist enormously with countering this shortage. The small number of gas reserves that are left in the country will be preserved for longer. Additionally, Importing gas from Iran will replace the expensive furnace oil used in Pakistan’s power plants, saving up to one billion dollars annually. The agreement also includes a provision that if Pakistan imports gas from other countries at a lower price, Iran will adjust its prices accordingly. Other than these specific benefits, the project will create job opportunities for the people of Sindh and Balochistan. The power sector overall will be strengthened.
Potential Impact of Raisi’s death
On April 22, Ebrahim Raisi visited Pakistan reflecting on the growing bilateral trade between the two nations. Despite risk of sanctions from the US and the rivalry Iran and Saudia, both of which stand as allies to Pakistan, this trip in particular marked the commitment of the two countries to one another. Instead of backing down, Pakistan decidedly moved forward to find ways around these complications. Mumtaz Zahra, a spokesperson of the foreign ministry stated, “We have noted some statements have been made by the United States. We are also engaged with the United States and discussed the various aspects of Pakistan’s energy needs.”
Simultaneously the logistical progress was underway on each side and the pipeline project continues. However, with the Ebrahim Raisi’s death, the strong ties between the two countries can possibly be impacted. Especially given this challenging history. The approach that the new leadership of Iran takes can possibly change the course of this project’s completion.
