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Liquefied Natural Gas terminal in Gwadar planned

Thursday, 08 Jul, 2010

The estimated cost of Pakistan segment is $1.2 billion to be incurred over a four year period. The project is planned to be funded at a debt-equity ratio of 70:30 requiring an equity investment of $373 million and debt financing of $872 million. - File Photo.

KARACHI: Inter-State Gas Systems Private Limited (ISGSPL) Managing Director Naim Sharafat has said that in case the Iran-Pakistan Gas Pipeline Project does not materialise, an LNG terminal will be set up in Gwadar to allow re-gasified LNG to the system.

In a presentation given to the Senate Standing Committee for Petroleum and Natural Resources here on Wednesday at the head office of Sui Southern Gas Company Limited (SSGCL), Mr Naim said that the Gas Sale Purchase Agreement (GSPA) was broad enough to allow force major relief in the event the project is hampered due to UN sanctions on Iran.

On current status of the project, MD ISGSPL said that a detailed route survey was in progress to pave way for the engineering and design of the pipeline facilities.

Iran and Pakistan inked the historic agreement in Tehran in June for the supply of natural gas to Pakistan from 2015, says a press release of SSGCL.

The meeting was chaired by the senate committee chairman Sabir Ali Baloch.

The ISGSPL MD who was accompanied by CFO Mobin Saulat described salient features of the 1,150-km pipeline which will connect Iran’s South Pars gas field with Balochistan and Sindh provinces.

Kamran Lashari, Secretary Ministry of Petroleum and Natural Resources also participated in the meeting. Committee members Jehangir Badar, Abbas Khan Afridi, Dr Muhammad Ismail Buledi, Dr Safdar Ali Abbasi, Mir Mohabat Khan Marri, Nawabzada Muhammad Akbar Magsi and Pervaiz Rashid also took part in the proceedings.

Mr Naim informed the senators that Pakistan would construct about 780-km 42” diameter pipeline from the border, traversing along the Makran Coastal Highway to connect with its existing gas transmission network at Nawabshah. Almost 665-km of the pipeline will pass through Balochistan, while about 115-km of the pipeline will be laid in the Sindh province, he added.

The estimated cost of Pakistan segment is $1.2 billion to be incurred over a four year period. The project is planned to be funded at a debt-equity ratio of 70:30 requiring an equity investment of $373 million and debt financing of $872 million.

The MD ISGSPL said that the project’s debt portion was expected to be secured from a combination of domestic and international financiers including Sindh and Balochistan governments, SSGC, SNGPL, OGDCL, PPL, PARCO and NBP (whose contribution will be $190 million or 51 per cent of equity structure) as well as potential private investors including Petronas and Gazprom (whose contribution will be $183 million or 49 per cent of the equity structure).

He stated that under the GSPA Pakistan would import 750 mmcfd of gas with a provision to increase it to one billion cubic feet a day (bcfd).

The senators suggested that the stakeholders in the routes traversing the pipeline must be taken into confidence, majority of which are remote and less developed areas, with clear-cut assurances for the provision of new schools, hospitals and vocational training centres.

The senate committe chairman, Sabir Baloch, said that it was important that the project should start as soon as possible to bridge the widening natural gas demand-supply gap.

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