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How 'America First' could jump start Iran-Pakistan pipeline project

While there are important obstacles in the way of the realization of the Iran-Pakistan pipeline, the Trump administration’s policies amid the rise of Imran Khan could tip the scales in the project's favor.
Irani workers weld the pipeline during a groundbreaking ceremony to mark the inauguration of the Iran-Pakistan gas pipeline, in the city of Chahbahar in southeastern Iran March 11, 2013. Ahmadinejad and Zardari marked the start of Pakistani construction on the much-delayed gas pipeline on Monday, Iranian media reported, despite U.S. pressure on Islamabad to back out of the project. REUTERS/Mian Khursheed  (IRAN - Tags: POLITICS ENERGY BUSINESS) - GM1E93C06X401

Iran is cheerful with Imran Khan in office next door. Even before his inauguration as Pakistan’s new prime minister, President Hassan Rouhani picked up the phone to congratulate Khan and invite him to Tehran. There are two main reasons, among others, for Iran’s cheerfulness. As discussed in an Aug. 4 conversation between Iran’s ambassador to Pakistan, Mehdi Honardoost, and the Pakistani prime minister, there is the prospect of Islamabad playing a role in helping to improve relations between Tehran and Riyadh. There is also the matter of the future of the long-stalled Iran-Pakistan (IP) natural gas pipeline. Honardoust asserted the Islamic Republic’s desire to see this project, which could “change the future of Pakistan,” finally come to fruition. But does Iran have the capacity to operationalize the project, and does it really hold the potential to change the future of Pakistan?

One key issue is the matter of Iran’s natural gas reserves and its ability to extract it. According to British Petroleum’s 2017 report, Iran has the largest proven natural gas reserves in the world at 1,183 trillion cubic feet (tcf), ahead of Russia’s 1,139 tcf. With this vast resource in hand, Iran in 2016 produced 202.4 billion cubic meters (bcm) of natural gas — the third highest in the world, accounting for 5.7% of global output. Even though consumption stood at 200.8 bcm in the same year, the 1.6% difference between the growth rate of consumption and production in 2016 implies that Iran already has surplus production capacity, which is projected to increase.

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