Pakistan Forms High-Level Panel to Resolve Iran Gas Pipeline Dispute
Prime Minister Shehbaz Sharif has constituted a high-level committee to seek a negotiated solution to the long-running Iran-Pakistan gas pipeline dispute as Islamabad faces potential financial liabilities from international arbitration. Petroleum Minister Ali Pervaiz Malik disclosed the development in the Senate on Tuesday, saying the government wants to balance legal risks with Pakistan's future energy requirements.
The committee has been tasked with examining the legal, financial and energy dimensions of the stalled project before recommending a way forward. Malik told lawmakers that Pakistan wants an outcome that protects its national interests while avoiding further complications arising from the dispute with Iran. The government is therefore pursuing negotiations alongside its response to the arbitration proceedings.
The issue was raised in the Senate by Senator Talha Mahmood, who questioned the government's preparedness to receive Iranian gas if obstacles to the project were removed. He sought details about infrastructure on the Pakistani side and asked how quickly the country could integrate supplies from Iran into its domestic gas network if the project were eventually cleared to proceed.
The dispute originates from the gas sales agreement signed by Pakistan and Iran in 2009. Under the arrangement, Iran was to supply Pakistan with 750 million cubic feet of natural gas per day for 25 years from the South Pars gas field. Pakistan was originally required to complete a 781-kilometre section of pipeline on its territory, with supplies expected to begin in 2015.
Iran completed substantial work on its side of the project, but construction in Pakistan remained stalled. Islamabad has repeatedly cited international sanctions on Tehran and financing difficulties as major obstacles to implementation. After years of delay and extensions, Iran initiated arbitration proceedings in Paris, creating the possibility that Pakistan could face substantial financial claims over its failure to fulfil contractual obligations.
Malik said the newly formed committee is assessing the scale of Pakistan's possible liability, the implications of the international litigation and the country's long-term demand for natural gas. He also stressed that the governments of Pakistan and Iran remain in contact and are seeking an amicable resolution rather than allowing the disagreement to deepen further through prolonged legal proceedings.
The pipeline remains strategically important for Pakistan because domestic gas supplies have declined while demand from households, industry and other sectors continues to put pressure on the energy system. Access to Iranian gas could potentially add a major source of supply, but any decision must account for sanctions exposure, financing requirements, infrastructure development and the commercial terms under which the gas would be delivered.
The government is also examining gas-related concerns in Balochistan through a separate committee headed by Deputy Prime Minister and Foreign Minister Ishaq Dar. Attention will now focus on the recommendations of the prime minister's pipeline committee and whether Islamabad and Tehran can reach a negotiated understanding before the arbitration process creates additional financial or diplomatic consequences for Pakistan.