Pakistan, which is likely to award engineering and equipment procurement contract for much awaited Iran-Pakistan gas pipeline soon, is expecting to get Chinese nod for the project to meet ever-growing energy needs of the country, TheNation has learnt.

“Pakistani delegation, led by Federal Water and Power Minister Naveed Qamar, has also sought investment and offered the engineering and equipment procurement contract for the Iran-Pakistan gas pipeline to China, sources privy to the development shared while talking to this scribe, adding that Pakistan is likely to finalize an engineering and procurement deal with China for the Iran-Pakistan gas pipeline project, which may also provide financing in line with the growing energy cooperation between the two sides.

Currently, a Germany based consultancy firm ILF is conducting a route survey on the Pakistani side of the pipeline and will shortly be completing the assigned task. Then, the engineering and equipment procurement contract will be granted. 

In a new development, Pakistan has sought a six-month waiver from Iran in executing its part of the $3 billion IP gas pipeline project. The project, which was earlier scheduled to come on stream by December 31, 2014, will now be delayed till June 2015.

Both sides had agreed on the GSPA commencement date of December 31, 2014 to make the project operational, and there was a clause of take and pay in the agreement under which any of the two countries that caused a delay in completing the project would be liable to $200 million penalty per month after December 31, 2014. Both countries are to complete the project under a segmented approach.

According to a top official at the ministry of petroleum and natural resources, Pakistan has formally asked Tehran to extend a waiver for at least 6 months since Pakistan fears that the project might get delayed because of unforeseen hurdles.

“The authorities in Tehran are considering Pakistan’s proposal and will come up with their reply in the meeting of Iran-Pakistan Coordination Committee (IPCC) that is scheduled for August 25, said the official. “We are quite confident that Pakistan will be able to complete the project well before December 31, 2014, as we have completed the survey for laying the pipeline from MP 250, a point at Pak-Iran border, to Nawabshah but we have sought the waiver only to avert the penalty of $200 million, which will be imposed under the take and pay clause of the agreement if Pakistan misses the December 31, 2014 deadline,” the official explained.

To a question, he said that the government has issued the Expression of Interest for interested parties to build the mega project. Companies from China, Russia and Europe have shown keen interest to develop the project on the Pakistani side.

Under phase-1 of the project, sources said, the joint venture of ILF-NesPak was to complete in an 18-month-long period the survey for the route of the pipeline, bankable feasibility study, front-end engineering design (FEED), environmental impact assessment (EIA), and supervision of detail route survey (GRS). The joint venture completed the survey in 25 days and massive progress has also been made on bankable feasibility study, FEED, EIA, and GRS.

Since the process of initiating phase-1 was delayed by almost 2 months there are fears that the second and third phases of the project might also get delayed. This is the main reason that Pakistan has sought the waiver: to avert the huge penalty of $200 million every month if the project fails to come on stream by December 31, 2004.

“There are some unforeseen factors that have appeared as hurdles in starting phase-1 on time as Pakistan is at war with militants and faced with an appalling law and order situation in Balochistan.” However, sources said Pakistan seems determined to complete phase-1 in 15, or maybe 12, months instead of 18.

(Source: thenews.com.pk)

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