Iran–Pakistan Gas Pipeline and US Sanctions
Overview
Pakistan has not built its section of the Iran–Pakistan gas pipeline, citing US sanctions on Iran. Iran began arbitration in Paris in September 2024, with Pakistan's exposure reported at up to $18 billion. In January 2026 Pakistan was reported to be seeking a 10-year extension, or a settlement shelving the project unless a US waiver is secured.
Latest updates
See archiveShelving proposed pending a waiver
Pakistan was reported to have told Iran it would shelve the project under an out-of-court settlement but could revive it if a US sanctions waiver were secured. (Profit (Pakistan Today))
Pakistan seeks extension to 2035
Pakistan was reported to have asked Iran for a 10-year extension, to 2035, to implement the project, citing intensified US sanctions. (The News)
Iran launched arbitration against Pakistan in Paris under the 2009 gas sales and purchase agreement
Positions on the record
Islamabad says
Pakistani officials argue that US and international sanctions on Iran made it impossible to meet the agreement's obligations.
Quoted or summarised from the linked public statements only.
Recent developments
The pipeline is the clearest case of US sanctions on Iran directly constraining Pakistan's energy choices. A large arbitration award would strain Pakistan's finances, while building the line without a waiver would risk US penalties.
Recommended resources
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Iran threatens Pakistan with US$18 billion pipeline claim
via Global Arbitration Review
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Pakistan requests Iran pipeline extension until 2035
via Digital Pakistan
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Pakistan seeks 10 more years to implement stalled IP gas pipeline project
via The News
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Pakistan considers shelving gas pipeline project with Iran but offers revival if US sanctions waiver is secured: report
13 January 2026
via Profit (Pakistan Today)
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US warns Pakistan of 'ramifications' of business deals with Iran amid gas pipeline dispute
via Arab News
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Islamabad to seek US waiver for Iran pipeline
via Dawn
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Pakistan seeks extension on Iran gas pipeline amid arbitration
via Bloom Pakistan
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Gas pipeline project 'impossible' under US sanctions, Pakistan tells Iran
via Arab News
Update archive
LatestIran starts arbitration
Iran launched arbitration proceedings in a Paris-based forum under French law over Pakistan's failure to build its section, according to Pakistani press reports. (Digital Pakistan)
