Govt likely to revive strategically vital Gwadar LNG project

Earlier, the scheme was shelved apparently after pressure from Riyadh

ISLAMABAD: The government is likely to revive the stalled $2.3 billion Gwadar LNG pipeline project, an alternative plan for laying the Iran-Pakistan gas pipeline, keeping in view its huge strategic importance in respect of diversification of fuel supplies and protection from the impact of any international sanctions on Iran.

Earlier, the Cabinet Committee on Energy, chaired by former prime minister Nawaz Sharif, had shelved the liquefied natural gas (LNG) pipeline project, apparently succumbing to pressure from Saudi Arabia.

Saudi Arabia, which has cut diplomatic and economic ties with Qatar due to the latter’s alleged support for terrorism, also forced Pakistan to sever its relationship with Qatar and Iran.

Giving in to the immense pressure, the Cabinet Committee on Energy put the Gwadar LNG pipeline project on the back burner, believing that the move would stave off the threat from Riyadh.



The energy committee only cited the higher cost estimated at $2.3 billion for setting aside the project. However, according to officials, the cost also included $600 million in duties and taxes.

Now Prime Minister Shahid Khaqan Abbasi, who was petroleum minister earlier, has signalled that the project would be taken up for review because of its strategic importance.

The Ministry of Energy has consistently pressed the government to add this project to the China-Pakistan Economic Corridor (CPEC), but to no avail.

In support of the project, officials pointed out that several new industrial zones, which would be set up along the CPEC route, would require gas and that was why the government wanted to build the pipeline.

Under the plan, an LNG terminal will also be set up at Gwadar Port for handling and processing LNG imports, which would boost economic activity at the seashore.

Pakistan was required to lay the Iran-Pakistan gas pipeline by December 2014, but international sanctions on Iran for its alleged nuclear programme - a claim which Tehran forcefully rejects - prevented Islamabad from pressing ahead with the plan.

Now, the government plans to connect the Gwadar LNG pipeline to the Iranian border if all restrictions are removed.

Officials insisted that the project was feasible even in the absence of Iranian gas flows as it would have an LNG terminal at the deep-sea port of Gwadar, where two LNG ships could be berthed at a time.

They described the Gwadar LNG pipeline as very important, which would serve as the right of way for the Gwadar-Nawabshah gas pipeline for which all necessary approvals were in place including the issuance of a notification under Section 4 of the Land Acquisition Act 1894.



The route had been the same for the Iran-Pakistan pipeline, which was finalised after a comprehensive front-end engineering design and feasibility study by an international engineering consultant, and it would be extremely difficult to win approval for the route once it is abandoned.

Published in The Express Tribune, September 6^th, 2017.

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