Pakistan Shelves Iran-Pakistan Gas Pipeline Amid US Sanctions

Pakistan has decided to shelve the Iran-Pakistan gas pipeline project due to US sanctions, though it may revive the initiative if a sanctions waiver is secured. Iran is willing to extend the gas sale agreement, while Pakistan explores alternatives and manages domestic gas demands, mainly through imports from Qatar.

In a significant development, Pakistan has informed Iran of its decision to shelve the Iran-Pakistan (IP) gas pipeline project under an out-of-court settlement framework. The project, which has been stalled since 2014 due to US sanctions against Iran, remains a topic of backdoor diplomatic engagements, according to media reports.

Despite Iran's legal proceedings and willingness to extend the gas sale agreement for another decade, Pakistan argues that the revival of the project is contingent on securing a US sanctions waiver. Officials highlight reduced domestic gas demand and higher costs associated with the IP gas as key factors behind the decision to halt the initiative.

Pakistan plans to address its energy needs by relying more on liquefied natural gas imports from Qatar. Initiatives to boost LNG consumption and lift a decade-long ban on new gas connections are also underway, to manage the surplus created by the growing LNG supplies and to enhance the country's energy security.

(With inputs from agencies.)