Construction of $1.5bn IP gas pipeline project

Gazprom interested in project without int’l bidding

By Razi Syed

KARACHI: Russian energy giant Gazprom is interested in constructing $1.5 billion Iran-Pakistan (IP) gas pipeline project without any international bidding, sources in the Ministry of Petroleum and Natural Resources said on Saturday.
In this regard a high-level delegation held a meeting with the officials of Gazprom, which started on April 2, 2012 in Moscow for financial and technical assistance for this gas pipeline project.
The spokesman said due to positive negotiations between the two parties, Russian company was ready to facilitate with three services including engineering design, construction and financing for laying 781 kilometres (kms) long IP gas pipeline project.
Chinese Industrial and Commercial Bank of China (ICBC) pulled out itself from the project on US pressure after which, Pakistan sought Russian help in finalising the IP project.
Spokesman in the Ministry of Petroleum and Natural Resources said this decision of seeking Gazprom help was the outcome of the meeting of the sub-committee formed by the Economic Coordination Committee (ECC).
Gazprom expressed its interest to finance the billion-dollar IP gas pipeline project following Foreign Minister Hina Rabbani Khar’s visit to Russia in February 2012.
“There are chances the Pakistani government would likely relax procurement rules to facilitate the IP project,” said Pak-USA Oil Private Limited, Texas Director Fazal Ahmad.
According to Public Procurement Regulatory Authority, the international bidding is necessary, however the matter will be put before the next ECC meeting in order to acquire positive results in this regard, he added.
Pakistan in order to reduce power shortages was importing fuel from various sources, including Iran that resulted in higher domestic oil prices besides crippling the country’s industry, he maintained.
The project on completion would provide around 21.5 million cubic metres (7.8bn c/m) natural gas per year to Pakistan.
The maximum daily gas transfer capacity of the 56-inch pipeline, which runs over 900 kms of Iran from Asalouyeh in Bushehr province to the city of Iranshahr in Sistan and Balochistan province has been estimated at 110 million cubic metres.
Pakistan is also mulling it efforts for the completion of Turkmenistan-Afghanis-tan-Pakistan-India (TAPI) pipeline project.
In this regard, a final round of TAPI project talks between energy managers of Tetra partners is taking place on April 19, 2012 in Kabul.
“Afghanistan is not ready to be a part of TAPI project and in case of its withdrawal from the TAPI project then the 500 million cubic feet per day (mmcfd) share of Afghanistan would be distributed between Pakistan and India.” Under the agreement Pakistan and India’s share is 1,325 mmcfd each.
The 1,680-km-long TAPI gas pipeline backed by the Asian Development Bank would bring 3.2 billion cubic feet of natural gas per day from Turkmenistan’s gas fields to Multan and to the northwestern Indian town of Fazilka.

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