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Pak goes ahead with gas project with Iran, Consortium selected to arrange funds
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Poreg View: The decision to go ahead with the Iran gas pipeline and ask a consortium led by IBIC of China to raise funds makes a virtue out of necessity and at the same time sends a powerful message to Washington. Pakistan is gripped by acute power and gas shortages. With no hope of Central Asian Gas flowing into the country because of the continued turbulence in Afghanistan, President Zardari and his team have to look at the Iranian option. Ignoring the American pressure will earn some brownie points in what is essentially an election year for Pakistan. Domestic compulsions have invested the Iran gas project with urgency and therefore Islamabad has set the deadline of Dec 2014 for completion of the project estimated to cost around $1.25 billion.
Islamabad is also planning to increase the quantity of Iranian gas to be lifted from the border trade point and conveyed through pipelines up to Lahore. It has pegged the new demand at 1000 million cubic feet per day (MMCFD) up from the initial projection of 750 MMCFD. Increased in take should translate into a lower price. According to Dawn, the price negotiations will be entered into afresh; the bench mark will be the price offered by Turkmenistan and this option also will be pursued to keep the US happy in a manner of speaking.
During the recent visit of Turkmenistan president Gurbanguly Berdimuhamedo, a gas purchase agreement was signed as the first step to implementing the 1,680-km-long Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline. The project cost is estimated to be around $7.6 billion. Backed by the Asian Development Bank it will bring 3.2 billion cubic feet of natural gas per day (bcfd) from Turkmenistan’s gas fields to Multan and end at Fazilka, the Indian town close to Pakistan border. The pipeline will run alongside the Herat-Kandahar Highway in Afghanistan and pass through Chaman-Zhob-DG Khan-Multan in Pakistan. Afghanistan’s share would be 500 million cubic feet per day (mmcfd), Pakistan 1,325mmcfd, and India 1,325mmcfd. Target date for completion is end 2013.
Turkmenistan has the fourth largest proven reserves in the world. According to International Energy Outlook 2010, the world’s top reserves of gas are 6.609 trillion cubic feet. Imported natural gas from Turkmenistan and Iran will help Pakistan to meet around 70 percent of its domestic demand. TAPI will materailise only if Kabul wills and ensures safety and security for pipeline and personnel working on the pipeline. As of now, Afghanistan is unlikely to play ball unless it gets a price quote that is to its liking. Its wish is not materalising as of now.
It is in this backdrop the scales have been tilting heavily in favour of IP gas pipeline. Iran has its own urgency to win friends. Already Tehran has completed construction on the pipeline in Iranian side. For the remaining portion that falls within Pakistan, the route survey is being conducted by Germany-based consultancy firm ILF.
'The Iran-Pakistan gas pipeline project will be completed by 2013, one year a head of schedule', says Pakistan’s petroleum minister, Asim Hossein. The first gas flow is targeted by end 2014. The pipeline length will be about 2000km. Iran stretch will be 1220Km and Pakistan stretch will be 781 km. For the $1.25 billion Pakistani portion of the pipeline and will soon be completing its work
Energy hungry China has shown interest to join the I-P Gas pipeline and make it Iran-Pakistan-China (IPC) venture. The selection of consortium led by IBIC of China makes good political and commercial sense. Islamabad is looking to Beijing for help in the engineering job and equipment procurement.
Islamabad is also planning to increase the quantity of Iranian gas to be lifted from the border trade point and conveyed through pipelines up to Lahore. It has pegged the new demand at 1000 million cubic feet per day (MMCFD) up from the initial projection of 750 MMCFD. Increased in take should translate into a lower price. According to Dawn, the price negotiations will be entered into afresh; the bench mark will be the price offered by Turkmenistan and this option also will be pursued to keep the US happy in a manner of speaking.
During the recent visit of Turkmenistan president Gurbanguly Berdimuhamedo, a gas purchase agreement was signed as the first step to implementing the 1,680-km-long Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline. The project cost is estimated to be around $7.6 billion. Backed by the Asian Development Bank it will bring 3.2 billion cubic feet of natural gas per day (bcfd) from Turkmenistan’s gas fields to Multan and end at Fazilka, the Indian town close to Pakistan border. The pipeline will run alongside the Herat-Kandahar Highway in Afghanistan and pass through Chaman-Zhob-DG Khan-Multan in Pakistan. Afghanistan’s share would be 500 million cubic feet per day (mmcfd), Pakistan 1,325mmcfd, and India 1,325mmcfd. Target date for completion is end 2013.
Turkmenistan has the fourth largest proven reserves in the world. According to International Energy Outlook 2010, the world’s top reserves of gas are 6.609 trillion cubic feet. Imported natural gas from Turkmenistan and Iran will help Pakistan to meet around 70 percent of its domestic demand. TAPI will materailise only if Kabul wills and ensures safety and security for pipeline and personnel working on the pipeline. As of now, Afghanistan is unlikely to play ball unless it gets a price quote that is to its liking. Its wish is not materalising as of now.
It is in this backdrop the scales have been tilting heavily in favour of IP gas pipeline. Iran has its own urgency to win friends. Already Tehran has completed construction on the pipeline in Iranian side. For the remaining portion that falls within Pakistan, the route survey is being conducted by Germany-based consultancy firm ILF.
'The Iran-Pakistan gas pipeline project will be completed by 2013, one year a head of schedule', says Pakistan’s petroleum minister, Asim Hossein. The first gas flow is targeted by end 2014. The pipeline length will be about 2000km. Iran stretch will be 1220Km and Pakistan stretch will be 781 km. For the $1.25 billion Pakistani portion of the pipeline and will soon be completing its work
Energy hungry China has shown interest to join the I-P Gas pipeline and make it Iran-Pakistan-China (IPC) venture. The selection of consortium led by IBIC of China makes good political and commercial sense. Islamabad is looking to Beijing for help in the engineering job and equipment procurement.
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