Pakistan and Iran have agreed to advance the Peace Iran-Pakistan (IP) gas project worth US$7.6bn with a new round of talks expected to draw up a comprehensive plan to continue with the construction works. The 2,600 km long, 750 mcf/d (21 mcm/d, or 7.7 bcm/year) gas pipeline has been planned since 1995, but been repeatedly postponed, remaining stagnant since 2019 due to US sanction threats. Iran finished its section of the pipeline in 2011 and Pakistan has yet to begin construction works. The talks should start within two to three weeks, with the project scheduled to be completed before September 2024 or Pakistan could incur in breach of contract and be subjected to international arbitration.
Iran has the world’s second largest gas reserves (behind Russia), amounting to about 34,000 bcm, i.e. 17% of the world’s total conventional gas reserves (end of 2022). At the end of 2022, Pakistan had an electricity capacity of 43 GW, with gas accounting for 36%, hydro for 25%, coal and lignite for 15%, oil for 13%, nuclear for 6% and wind and solar for 3% each.