Energy-starved Pakistan is seeking sanction-free Iranian gas, says Musadik Malik

Minister for Petroleum Musadik Malik said Pakistan is seeking access to Iranian gas, but cautioned that Islamabad is not in a position to face international sanctions.

“Our position is very clear – we would like to have Iranian gas, but we want to come up with a mechanism by which we don’t face any sanctions,” Musadik said while addressing the Pakistan Energy Symposium in Islamabad on Wednesday.

“We are a poor country and cannot afford any sanctions.

“By the same token many countries have gotten waivers and extensions,” he said, citing the example of Turkiye, Iraq, and Azerbaijan.

Iran, Pakistan seek ways to complete gas pipeline project

The Iran-Pakistan gas pipeline deal, signed in 2010, envisaged the supply of 750 million to a billion cubic feet per day of natural gas for 25 years from Iran’s South Pars gas field to Pakistan.

The pipeline was to stretch over 1,900 kilometres (1,180 miles) - 1,150 km within Iran and 781 km within Pakistan.

Tehran says it has already invested $2 billion to construct the pipeline on its side of the border, making it ready to export.

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However, Pakistan, which remains in dire need for cheap gas with its own reserves dwindling fast, did not begin construction and shortly after the deal said the project was off the table for the time being, citing international sanctions on Iran as the reason.

Addressing the symposium, Malik said the government has come up with multiple policies to enhance indigenous production of petroleum products including gas and crude oil.

“Just the growth of population alone tells you how much energy we need,” he said. “For every 1% growth in GDP, you need 1.5% growth in energy.”

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He said the yearly import of oil and gas imports amounting to $18-24 billion is not sustainable for a country like Pakistan.

Malik said the government intends to increase its indigenous production of oil and gas, for which it had put out blocks for bidding. “The government is trying to attract global players in the exploration activities,” he said.

“Pakistan is open for business and the authorities remain committed to completely digitise the regulatory process in order to make it completely transparent,” he added.

Malik said Pakistan is also pushing for TAPI gas pipeline project saying

“We are championing TAPI with the Turkmenistan government. We are trying to work around the country and have come up with various value propositions,” he said.

The operationalisation of TAPI will provide Pakistan access to a less expensive, continuous stream of gas, the minister said.

The minister’s remarks come at a time when Pakistan faces runaway inflation that has only shown signs of slight deceleration in recent months. The headline inflation figure hit a record high in May last year, triggering the country’s central bank to raise the key interest rate further.

The country is currently engaged in talks with the International Monetary Fund (IMF) for a 24th bailout programme, but analysts warn that the bigger, longer facility will come at the cost of several growth-slowing measures.