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Pakistani Officials Place Request With China For Construction of Third LNG Pipeline

Islamabad: Authorities in Pakistan have made a plan in which a third LNG pipeline will be laid and the government has contacted Beijing for the construction of the project. The LNG pipeline will be laid from the port city of Sindh to Lahore by keeping in mind the increasing demand of the private sector said a senior official.

He said, “We have placed the request with authorities concerned in China for deliberating the details of the project. Initially the private sector itself desired to build the pipeline, but in the wake of technical and some financial constraints, the ministry came forward and submitted the request with Chinese authorities seeking help for making the project a success story.” He further added that, “We are hopeful of positive reply within days”.

The official said that the pipeline would be built on PPP (public private partnership) mode. China is already initiating the construction of 700 kilometers gas pipeline which would be laid from Gawadar to Nawabshah at a cost of $1.35 billion and to this effect Inter-State Gas System (ISGS) on behalf of Pakistan and China National Petroleum Corporation (CNPC) on behalf of China have signed the agreement.

Russia is also working on South-North (S-N) LNG pipeline which has a capacity to carry 1.2 billion cubic feet of gas from Karachi to Lahore to cater to the rising needs of energy of load center.

Russian team would arrive on Wednesday for crucial talks on the pipeline and three to more talks would be held between the parties. The third LNG pipeline which the private sector wants to construct is now being handled by the Chinese authorities. The pipeline would have the capacity to transport the re-gasified LNG of 1.2 bcfd.

The official said that the Gawadar-Nawabshah LNG pipeline project would be constructed with 85 percent financing from Chinese Company and 15 percent from the government of Pakistan and the price at which the gas line would be laid is much below from the estimated cost. The government of Pakistan will arrange the financing of Rs15-12 billion for the project from the head of GIDC (gas infrastructure development cess). The project would be completed under EPC Financing mode.

Once the pipeline is completed then Pakistan will extend the pipeline with three compressor stations by 81 kilometer backward from Gawadar to the Iranian border as part of IP gas line. The pipeline when connected with Iran will become economically feasible since pipeline would transport the gas of 750 mmcfd from Iran and 500 from LNG terminal. Iran will increase the gas export up to 1 billion out of which 250 mmcfd gas will be earmarked to cater to needs of Gawadar.

Sources said that the LNG terminal with 12 kilometer pipeline will be built at Gawadar port with capacity to handle LNG of 500 mmcfd by the same Chinese company on BOOT (build, own, operate and transfer) basis.

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