|Pakistan to lay down gas pipeline from Gwadar to Nawabshah||
Pakistan is in the process of working on the ways to revive the Iran-Pakistan (IP) gas pipeline project, which will lead to import of natural gas from the neighboring country, Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi said on Monday.
Abbasi told The News in an exclusive interview that there are international sanctions on import of natural gas from Iran. He cited as a recent example the fine of about $9 billion imposed on the largest French bank, BNP Paribas, because of its financing transactions with Iran and other countries in violation of the U.S.-imposed sanctions.
However, he added, his government is working to find ways to revive the IP pipeline project.The minister expressed keenness of his government about resolution of the energy crisis in the country at the earliest.
Asked whether the IP project, which is yet to be launched and is bound to miss the deadline of December 2014, is really on track, Abbasi said Pakistan is committed to the IP project. “We need the gas and we want the gas,” he added.
Despite the eagerness expressed by successive Pakistani governments for the project, no government has been able to move ahead on it. Pakistan faces a daily shortage of about two billion cubic feet of natural gas.
The medium-term solution to this problem is import of gas through pipelines or in the form of liquefied natural gas (LNG). Although the outgoing PPP government held ground-breaking ceremony of the IP project in early 2013, no tangible development has taken place related to work on this important project.
The IP gas pipeline project has been conceived to import 750 mmcfd (million metric cubic feet per day) gas from Iran’s South Pars gas field over the Pakistan-Iran border. The project is being implemented on a segmented approach under which each of the two countries is responsible for the construction of the pipeline in its territory.
Iran, which has the world’s second-largest known gas reserve, has already completed most of the work on the pipeline. The exact deadline for the completion of the project is December 31.
Besides reducing the increasing supply-demand gap, imported natural gas is the cheapest and most suitable fuel for power generation. The imported gas will help in reduction of power outages in the country. Moreover, it will lead to avoidance of costly thermal generation through diesel and furnace oil.
Meanwhile, a senior official of the Federal Ministry of Petroleum expressed caution at reports Pakistan will receive exemption over the delay in its execution of the project. The official, who asked not to be named, said the petroleum ministry made no such statement, calling it an unsubstantiated report. The confidentiality needed in commercial contracts needs to be maintained, he added.
Islamabad correspondent adds: Iran was told that Pakistan was going to initiate the laying down of 711 kilometers of pipeline from Gwadar to Nawabshah as a part of the LNG import project and whenever the U.S. sanctions on Iran were lifted, the pipeline would be extended by 70 kilometers to Iranian border, said the petroleum minister.
“Whenever the U.S. sanctions are lifted, this Nawabshah-Gwadar pipeline will be extended backwards from Gwadar to MP 250, a point at Pak-Iran border for the import of Iranian gas.”
Pakistan has already invoked the clauses pertaining to force majeure and excusing event written in the agreement in view of the U.S. sanctions that have factually impeded Pakistan from initiating the laying down of the pipeline.
This invocation is to avert the penalty of $2 million per day from January 1, 2015 to be imposed by Iran in case of Pakistan’s failure to lay down by December 31, 2014, the 781 km pipeline from Iranian border to Nawabshah under the gas sales purchase agreement signed between the two countries,
Abbasi told this scribe that his ministry was going to table in the meeting of the economic coordination committee the summary of LNG project at Gwadar along with a pipeline to be laid down up to Nawabshah for approval.
The minister said the secretary petroleum and natural resources is to visit Iran some time in this month to sensitize the authorities in Iran that Pakistan is serious on IP project, but it does not initiate the project because of the economic sanctions on Iran.
The minister said the LNG and IP projects will be initiated through the tender process or under the government-to-government arrangement with the help of China.
Companies from China, Japan and Russia have shown interest to build the LNG terminal at Gwadar port and lay down the pipeline, he said. After the ECC approval, “We will try to get this project included in the list of early harvest projects to be pitched before China for funding and completion of the project.”
The pipeline will require $1 billion and over $2 billion be needed to construct the terminal with LNG handling and re-gasification facilities and to erect large LNG storages facilities.
“This will be the second LNG terminal as the first fast track terminal is being constructed by Engro’s ETPL (Elengy Terminal Pakistan Limited) at Port Qasim, which is scheduled to be completed by March 31, 2015) but we are hoping that the terminal will be completed by December this year,” the minister said.
The Gwadar-Nawabshah pipeline will have the same specifications with a diameter of 42 inches proposed for the Iran-Pakistan gas pipeline. According to officials, it has been decided to lay down the pipeline from Gwadar to Nawabshah under the G2G arrangement with China that will transport at least 500 mmcfd after re-gasification of imported LNG.
This pipeline will be connected with Iranian border and import 1 billion cubic feet gas per day. This means that the capacity of pipeline to transport the gas will be at 1.5 billion cubic feet gas per day.The official said that LNG terminal to be constructed at the Gwadar Port will have handling capacity of 690 mmcfd.
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