Gas pipeline: Pakistan, Iran to sign construction contract today

Published: February 15, 2013

According to Hussain, the Iranian company will complete the process of constructing the pipeline in 15 months. ILLUSTRATION: JAMAL KHURSHID

ISLAMABAD: 

The critical Iran-Pakistan gas pipeline project is entering the implementation phase as Pakistan’s state-owned firm Inter-State Gas Systems and Tadbir Energy Costar Iranian Co will sign a construction contract for laying the pipeline in Pakistan today (Friday).

Adviser to Prime Minister on Petroleum and Natural Resources Dr Asim Hussain told this to the National Assembly Standing Committee on Petroleum and Natural Resources in a meeting here on Thursday. Engineer Tariq Khattak chaired the meeting.

Pakistan and Iran are forging ahead with the project despite opposition from the US, which has imposed sanctions on Tehran for its alleged nuclear programme.

According to Hussain, the Iranian company will complete the process of constructing the pipeline in 15 months.

Frontier Works Organisation (FWO), Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines Limited (SNGPL) will also take part in the construction work.

Sources said Pakistan and Iran had finalised per kilometre cost of laying the pipeline, which will be of 42 inches and spread over 781 km, as well as markup on loan being provided by Tehran.

The per kilometre cost will be Rs190 million and markup on $500 million loan will be 3% per annum. “Iran had demanded 4% interest on loan,” a source said.

The financing will be for 20 years with a five-year grace period.

SNGPL on verge of default

Briefing the parliamentary panel, Hussain said the prime minister had directed the implementation of parliamentarians’ gas development schemes, but the gas companies were not capable of completing the work.

He disclosed that Sui Northern Gas Pipelines Limited (SNGPL) was on the verge of financial default and had no money to pay salaries to its employees. “We have asked the prime minister to pay subsidy to the company, which will help it to continue operation,” he said.

Hussain held the Oil and Gas Regulatory Authority (Ogra) – the oil and gas sector’s regulator – for the sorry state of affairs at SNGPL, which he feared would not be able to function after June. “Gas theft is going on, but Ogra is not playing any role in restricting the practice,” he added.

The regulator was working according to rules and was performing its functions, retorted Ogra Chairman Saeed Khan. Rather, he blamed the gas companies for doing nothing to stop the gas theft.

He pointed out that Ogra had set a benchmark, allowing gas companies to recover some of the losses on account of gas theft from registered consumers. But at the same time, he said, gas companies could not reduce the distribution losses and gas theft.

“If the petroleum adviser wants to shut down Ogra, do it,” he remarked, but reminded the panel that foreign countries were taking steps to strengthen the regulators, but no such case at home.

During the meeting, the parliamentarians asked the Ogra chairman to allow 69 compressed natural gas (CNG) stations, which had applied for relocation, to operate as they had invested a huge amount in their business.

In response, the Ogra chief told them the CNG stations had been barred after the National Accountability Bureau (NAB) took action over their relocation.

Panel member Rana Afzal presented report of a subcommittee about loss of billions of rupees because of procurement of defective portable drills. The panel recommended strict action against the culprits involved.

Published in The Express Tribune, February 15th, 2013.

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Reader Comments (21)

  • HRK
    Feb 15, 2013 - 12:39AM

    Haven’t paid back ADB and now we’re going to get a $500m loan with 4% interest for 20 years? How long will this continue? Till no one wants to loan us money? Instead, if we start collecting tax properly and resolve our conflicts that result in our own pipelines being blasted every two days we’d be much better off. Someone teach these people the meaning of “chaadar dekh ke paa’on phailaao”.

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  • Feb 15, 2013 - 1:48AM

    Only Iran is the true friend of Pakistan…Recommend

  • Feb 15, 2013 - 1:56AM

    One of RARE good things done by this government. Although there is a strong speculation also expressed by western print media, that Army has been pushing govt since long to go ahead with the project,, but still, WELL DONE

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  • Vinod
    Feb 15, 2013 - 2:35AM

    This project will never materialize even after signature.U.S will punish pakistan if go
    forward with this project.Moreover difficult to coverup security over pipeline safety.
    Pakistan is already a bankcrypt country and can’t able to pay even if implemented.
    PAKISTAN IN SLAVERY…

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  • Sanjay
    Feb 15, 2013 - 5:18AM

    @Vinod.
    This is one of the rare constructive work by Pakistan. Lets appreciate & encourage them for this.

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  • TypicalPakistani
    Feb 15, 2013 - 5:27AM

    @Vinod. your comments seems Indian state wish!
    Alas, India could hold the USA’s pressure for this cheap gas.

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  • PapaJohn
    Feb 15, 2013 - 5:28AM

    @Vinod:
    Your assumptions are as accurate as your English Grammar.
    Suck it up!
    Cheers.

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  • The Khan
    Feb 15, 2013 - 6:13AM

    @Vinod:
    Poor guy gets his pleasure by insulting people with what i will call desi english. Must be from Bihar or karela

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  • Gary
    Feb 15, 2013 - 8:27AM

    Pakistan, not sure how feasible this project is, but wish you all the best!

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  • Sudheer
    Feb 15, 2013 - 10:14AM

    @PapaJohn
    Correct grammar doesn’t represent one’s intellect, you yourself is an example of it. Do you understand how your government is making fool of you and your ilk? I am hearing this gas pipeline saga for more than 15 years and so far nothing has happened on the ground, except signing one agreement after another to fool common people.
    Two pariah states Iran and Pakistan, need each other to stay in the news, the above news report is nothing more than that.

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  • jam
    Feb 15, 2013 - 10:41AM

    indeed its a good step for energy starving Pakistan but now all politician should unite to stabilize and bring peace in Baluchistan without which it is just blessing in disguise.

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  • Virkaul
    Feb 15, 2013 - 1:55PM

    If you guys leave emotions and rhetoric out, the discussion could be more meaningful. There are two or three proposals in the region. IPI (Iran, Pakistan, India) pipeline was initially mooted but India dropped out of this due to political pressure and safety of the pipeline. TAPI (Turkmenistan, Afghanistan, Pakistan, India) is US sponsored pipeline to tap Central Asian gas for supply to India, Pakistan. US also wants to counter Russian influence by an alternative from Turkmenistan to Europe via Turkey. All these lines are awaiting calming down of political situation to become viable as well as independence from control. That has not happened so far and Afpak war is the reason behind it.

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  • non political
    Feb 15, 2013 - 2:19PM

    India refused to inter into same deal due to America pressure, Pakistan at least going ahead. i request India to provide toilet facility to 68 percent India’s population.

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  • Mr Mulla Pakistan
    Feb 15, 2013 - 3:01PM

    Joke ……I read this same news 3 years ago and we were signing then as well…nothing ever gets done in Pakistan….in 5 years we still will not have started just like the dams we always talk about

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  • Bond
    Feb 15, 2013 - 3:54PM

    @HRK:
    would you count your Indian debts and 100 insurgencies going on for the last 50 years.Isn’t Indian going down the drain what was your GDP 10 years ago and where do you stand now.Just ponder and be ashamed.

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  • cautious
    Feb 15, 2013 - 5:04PM

    Why is this only being reported on this website — no mention in other newspapers including Iran.

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  • antanu g
    Feb 15, 2013 - 6:41PM

    @Sanjay:
    agree with you.lets rid of our bias ….for PEACE

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  • antanu g
    Feb 15, 2013 - 6:43PM

    @Vinod:
    we are not bankrupt….and we are one of the fastest growing economy…still we wilted under US pressure to cut down on Iranian oil import…now who acted like SLAVES? We Indians….or Pakistan?

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  • HRK
    Feb 15, 2013 - 6:48PM

    @Bond: Notice my use of “we” in my statements, indicating to any sane reader that I am a Pakistani. I took your advice of pondering over what we have achieved in the past and am very ashamed at what I see. Besides, finger pointing at India doesn’t resolve our own issues, and this is what most of us do instead of cleaning up our own home. And just as an FYI, our GDP has been the record lowest in our history during the current government and our debt has been the record highest.

    Take care =)

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  • gp65
    Feb 15, 2013 - 8:05PM

    @non political:
    India opted out in 2010 . At that time there was no US pressure. The reason was the high transit fee being quoted by Pakistan and unwillingness to provide security for the billion plus dollars of investment that India would have to make.

    Incidentally NBP has actually opted out due to Us pressure. The project still has not reached financial closure. Pakistan does not have a source of fundi g other than the Iranian loan which does not cover the whole project.

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  • gp65
    Feb 15, 2013 - 8:07PM

    @antanu g:
    Not Us pressure. India opted out well before that due to not reaching an agreement with Pakistan on the terms.

    Recommend

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