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Pakistan seeks a 10-year extension from Iran until 2035 for the stalled gas pipeline, facing $18 billion arbitration penalties. Deputy Prime Minister Ishaq Dar’s committee pursues diplomatic settlement while citing US sanctions as the main obstacle.
Read more: Pakistan Shelves Iran Gas Pipeline Amid Sanctions Impasse
Pakistan has formally requested Iran grant a decade-long extension until 2035 for completing the stalled Iran-Pakistan gas pipeline project, as Islamabad confronts an $18 billion arbitration penalty. Deputy Prime Minister Ishaq Dar leads a Ministerial Oversight Committee exploring options to minimize financial liability. Iran launched arbitration proceedings in September 2024 through a Paris-based forum under French law, with Inter-State Gas Systems named in the dispute.
Federal Minister Ali Pervaiz Malik confirmed the oversight committee’s ongoing review while legal battles continue. Pakistan’s Attorney General argues US sanctions on Tehran prevented compliance with the Gas Sales Purchase Agreement during the extended 180-day deadline. Iranian authorities demand compensation for Pakistan’s failure to construct its pipeline segment despite multiple extensions.
Officials anticipate arbitration verdicts between 2027 and 2028, though high-level diplomatic negotiations between Islamabad and Tehran continue alongside legal proceedings, with the Petroleum Division supporting Pakistan’s defense strategy.
