Pakistan has intimated to China its decision: LNG terminal, pipeline early harvest projects

Source : Business Recorder   Date : 10-01-2017   By : WASIM IQBAL 

 Pakistan has intimated to China its decision: LNG terminal, pipeline early harvest projects
Pakistan has intimated to China its decision: LNG terminal, pipeline early harvest projects

Pakistan has intimated its decision to China that LNG terminal and pipeline projects should be made part of the China-Pakistan Economic Corridor (CPEC). According to details, the Pakistani side wants to include the Gwadar LNG terminal and Gwadar-Nawabshah pipeline projects in the CPEC Early Harvest Programme. It was requested during the 4th and 5th Joint Energy Working Group (JEWG).

The project foresees the import of 600MMCFD LNG through Gwadar port. Under the proposed project, pipeline system from Gwadar to Nawabshah will be constructed along with installation of FSRU (floating storage and re-gasification unit)-based LNG re-gasification facilities at Gwadar port for injection of RLNG into the pipeline system.

In order to meet the growing energy demands in the country, the government is pursuing a comprehensive strategy which, inter alia, envisages construction and establishment of Gwadar-Nawabshah LNG Terminal and Pipeline Project. The project''s concept was approved by the ECC of the Cabinet on October 2, 2014 with an advice that the Ministry of Petroleum and Natural Resources must arrange funding on government-to-government or BOT basis. The commercial entities from both sides (Inter State Gas Systems (Pvt) Ltd Pakistan and CPP China) formally engaged pursuant to the signing of government-to-government framework agreement on April 20, 2015.

The ECC on April 11, 2016 considered the restructuring of the project under the government-to-government framework agreement for which necessary financing arrangement will be provided by the CPP. The work on Gwadar LNG terminal will also be undertaken on EPC+F basis.

Meanwhile, a price negotiations committee (PNC) has held several meetings with the CPP to negotiate the contract price of both the gas pipeline segment and LNG terminal at Gwadar. The final recommendations of the PNC along with the PC-I for the Gwadar-Nawabshah Gas Pipeline Project had been submitted with the Ministry of Planning for approval. Central Development Working Party (CDWP) of Ministry of Planning approved the PC-I on June 8, 2016. On September 30, 2016 the Executive Committee of National Economic Council (ECNEC) also approved the project.

Managing Director InterState Gas Systems, Mobin Saulat, shared the details of ISGS, Iran-Pakistan Gas Project (IP) and TAPI projects in the National Assembly''s Standing Committee on Petroleum and Natural Resources. He said that Pakistan shared with Iran amended Gas Sale and Purchase Agreement (GSPA) to extend implementation schedule and revise pricing under the $1.35 billion gas pipeline project. The IP project will be implemented in the extended period as an amendment in the GSPA was required and a draft amendment had been shared with Tehran that agreed to negotiate it along with some other changes, he added.

He said Gwadar to Iran Pakistan border would be completed later after lifting of the US sanctions. The length of the pipeline is 80 kilometres. Talking about the TAPI Gas Pipeline Project, he said 85 per cent of $10 billion equity was raised by Turkmenistan and $200 million each were paid by Pakistan, Afghanistan and India.