The work on the Iran-Pakistan gas pipeline has not started yet due to US sanctions that have still not been lifted after the US-Iran deal. The sanctions will be lifted in phases, and the delay comes as a mixed blessing as we not only need to take on loans to complete the pipeline but we also are being penalised by Iran for delays.

Our deal with Iran requires us to pay a penalty if we fail to import Iranian gas. The government will be taking bank loans to finance the pipeline in Pakistani portion of which could cost up to $2 billion while the Iranian section is almost complete. The Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi has claimed that the energy crisis in Pakistan will end by 2018, but will it be thanks to Iran? The minister has insisted that the federal government is dedicated towards ending the energy crisis in Pakistan for which the import of Liquefied Natural Gas (LNG) from Qatar was the “intelligent option”. However, it was also a very expensive option. Yet with work to be done and penalties pending for not importing Iran gas, the pipeline will be will be a great success if it is completed by 2018 and does not result in a big loss to the exchequer. Estimates are that the pipeline will take at least three years to complete, and points to another contradictory statement on the part of the government. If the energy crisis is predicted to end by 2018, the pipeline will not be a part the solution.

There are also reports that Pakistan may need to ask China to fund the project. In 2013 Iran conveyed to Pakistan that it could no longer offer $500 million for the project and Pakistan also conveyed that it was not in a position to implement the project due to sanctions on Iran. The project has been stagnant since. The situation led to an agreement between the two sides to refer the matter to the experts group to prepare a workable implementation — and China could be the solution. For better or for worse, the pipeline is a forgone conclusion. We have signed the deal and it has to be built. What must be taken care of is that gas is provided to the Pakistan consumer as quickly as possible so that at least someone can benefit.