ISLAMABAD: The caretaker government on Monday gave the go-ahead for the construction of a key gas pipeline from Iran’s border to Gwadar to address the country’s chronic energy shortage.
The approval was given by the caretaker cabinet and marks a step towards the implementation of the Iran-Pakistan gas pipeline project, which has been long delayed since 2013.
The decision to proceed with the construction of the 81-kilometer (km) gas pipeline was approved by the Cabinet of Ministers after approval by the government’s energy committee.
This will allow 750 million cubic feet of gas to be transported from Iran to Gwadar, providing a cheaper alternative to importing liquefied natural gas (LNG) for cash-strapped Pakistan.
The approval is also expected to protect Pakistan from potential $18 billion in fines for delaying the completion of the project. This will enable Pakistan to make substantial annual savings by purchasing gas from Iran at a more affordable rate.
Despite the threat of crippling sanctions by the United States (US) against Iran, Pakistan has decided to go ahead with the pipeline project. He is also working on legal and diplomatic efforts to circumvent sanctions for the pipeline project.
Also read: KP government protests proposed amendments to IRSA Act
Meanwhile, the outgoing federal cabinet has also given approval to complete the first phase of the gas pipeline project in the territory of Pakistan. With an estimated cost of $158 million, construction of the 81 km section of the pipeline is expected to begin soon.
The project gained momentum when the government’s energy committee recently approved the construction of the pipeline in Pakistan’s territory.
The establishment of the Ministerial Oversight Committee (MOC) also simplified the decision-making process.
While the Iranian section of the pipeline has been completed, construction of the Pakistani segment has faced delays due to uncertainty.
Iran has given Pakistan until September 2024 to complete the construction of the pipeline.