Iran-Pakistan Gas Pipeline - Cost-Benefit Analysis

Abstract

Iran-Pakistan (IP) Gas Pipeline is considered a controversial project in Pakistan. A large number of professionals believe that IP Gas Pipeline is an energy lifeline for Pakistan. In their view, due to common borders with Iran, financially and geographically it is the most viable option for this country. They argue that the project will be sustainable in terms of sufficient gas reserves of Iran, the overall cost of project is appropriate and price of gas is also reasonable. However, some other experts have totally different views and in the prevailing geopolitical and economic implications with regard to US and UN sanctions on Iran, they consider that this project is not feasible. In order to understand pros and cons of IP Gas Pipeline, this paper is an effort to critically evaluate the suitability of this project. It also attempts to explore possible answers to some important questions. For instance, what are the other available options for Pakistan to meet its energy requirements? Why Pakistan has opted for IP Gas pipeline in spite of US opposition? What would be the implications of US and UN sanctions on Iran? Is the cost-benefits analysis of the project in favour of Pakistan? What political and diplomatic measures should Pakistan undertake to counter negative implications of opting for IP Gas Pipeline?