Pakistan, Iran finalise gas pipeline deal

Pakistan will have intake of the fist flow of Iranian piped gas in its system by mid-2014 and 100 per cent flow (750 million cubic feet gas per day) by end of 2015 under the IP gas pipeline, said Naeem Sharafat, Managing Director of Inter-State Gas Company.

He was talking to our sources soon after the landmark Iran-Pakistan gas pipeline sovereign guarantee agreement was signed here late pn Friday evening.“The imported gas volume is nearly 20% of Pakistan’s current gas production and the supply is for a contracted period of 25 years, renewable for another 5 years.”

The agreement was signed by S.R. Kasaezadeh, Managing Director National Iranian Oil Company, and Irshad Kaleemi, Joint Secretary, Ministry of Petroleum and Natural Resources on behalf of the Government of Pakistan. Minister for Petroleum Naveed Qamar and Secretary Petroleum and Natural Resources Kamran Lashari also witnessed the ceremony.

Sharafat said that the Government of Pakistan had extended the sovereign guarantee against the Performance Guarantee and liabilities of the Inter-State Gas Company, which is responsible for the IP gas line project on behalf of Pakistan.

After the signing of the last document, the National Iranian Oil Company (NIOC) will issue to Pakistan a letter mentioning that Pakistan has completed all conditions precedents (CPs). For additional 250 mmcft gas per day, the cost of the gas will be equal to the cost of 750 mmcfd gas for which the agreement has been inked, as there exists a provision in the agreement.

“Pakistan will lay pipeline from Point 250 KMS at Pak-Iran border under segmented approach while Iran will itself lay pipeline from Paras gas field to Point 250 KMS.”

He said: “The whole imported gas will be dedicated to the power sector. The imported gas volume will support approximately 5,000 megawatts (MW) of power generation and will result in significant annual savings when compared with alternative fuels like HSFO, LNG, coal, etc.”

“The project is planned to be funded through public/private partnership. The capital cost for the Pakistan section is estimated at US $1.65 billion.” The construction of the pipeline, he said, will also create job opportunities, vocational training and health facilities and social uplift in backward areas of Balochistan and Sindh.

End.


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