China requested to construct third LNG pipeline


Shahrukh Syed

Islamabad—The authorities in Pakistan have carved out a plan under which a third LNG pipeline will be laid and to this effect, the government has contacted Beijing for materializing the project.
The said LNG pipeline will also be laid from the port city of Sindh to Lahore keeping in view of the massive surge in demand from private sector, a senior official privy to the development told Pakistan Observer.
“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.
“We are hopeful of positive reply within days”. The official said the pipeline may be built on PPP (public private partnership) mode. China is already upbeat in initiating the construction of 700 kilometers gas pipeline to be laid from Gawadar to Nawabshah at the 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 already signed the agreement. Apart from it, Russia is working on South-North (S-N) LNG pipeline with capacity to carry 1.2 billion cubic feet of gas from Karachi to Lahore to cater to the burgeoning needs of energy of load center — Punjab.
Russian team is due tomorrow (Wednesday) for crucial talks on the pipeline, the relevant official told saying the two to three more sessions of talks may be held between the two countries. The third LNG pipeline which the private sector had desired to construct has now been taken up with the Chinese authorities. The said pipeline will also be having the capacity to transport the re-gasified LNG of 1.2 bcfd.
Mentioning the Gawadar-Nawabshah LNG pipeline, the official said that the project will be constructed with 85 percent financing from Chinese Company and 15 percent from government of Pakistan, and the price at which the gas line will 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 will be completed under EPC Financing mode.
Once the pipeline is completed, then Pakistan will extend the same pipeline with three compressor stations by 81 kilometer backward from Gawadar to Iranian border as part of IP gas line. The pipeline when it is connected with Iran will economically become more feasible as the said pipeline will transport the gas of 750 mmcfd from Iran and 500 from LNG terminal. Later on 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.
However, the sources said, 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.