SINGAPORE: Pakistan is pushing ahead with plans to build a gas pipeline from Iran despite strong opposition from Islamabad's strategic ally Washington, according to tender documents.
State agency Inter State Gas Systems, which was set up in 1996 to oversee the development of the gas pipeline, has issued a tender inviting contractors interested in the project for pre-qualification.
"We expect that it should be about 50-60 days from the final day of submission, it will also depend on the number of applicants," a technical manager at ISGS said on condition of anonymity
"We would hope to start construction for the project by end of this year."
Another company source said the target was to see the first flow of gas from December 2016.
The project, which is estimated to cost between $1.5 to $1.8 billion, was proposed in the 1990s but has faced numerous delays. The United States has repeatedly urged Pakistan to drop the project because of its sanctions on Iran.
The document invites pre-qualification for a pipeline to transport high pressure natural gas from an off-take point near the port city of Gawadar to a gas integration point near Nawabshah.
COMMENTS (14)
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Above many Comments are employing the non-feasibility of the project due to non-availability of capital cost !!.. but no body seems to remember that out of all the major project now operational in Pakistan for how many we ourselves had the Capital cost ???? surely not even one (01).
To have an idea of the importance of project we must also see " Do we have any other alternative?" 1.is it LPG from Qatar @ 18$/unit which is more than 3 times the expensive 2.or is it LPG from Algeria ...approximate same cost ....... this is no including any transportation and storage cost after its in the country ....
these are just a few alternatives however comparing all these clearly highlights the importance of IP Gas in Pakistan's 10-25year future. Exiting from this project will surely mean suicide for Pakistan's economy, Not to mention all the Capital and Strategic pressures in the way which we must overcome.
@Sonya: remember you are talking to children.
Pakistan can hand over the Strategic Assets to its Strategic Partners and gain Strategic Advantage. In any case, these Strategic Assets can no longer give Strategic Depth to Pakistan and are only damaging Pakistan's Strategic Interests by causing sectarian conflicts and deaths of innocents on a daily basis. Trade off the Strategic Assets for a Free Gift of TAPI Pipeline which would supply gas cheaper than IP Pipeline. The result would be a peaceful and prosperous Pakistan. If Pakistan cannot do it on its own, it can give a blank check for a limited time to its Strategic Partners and their boots on the ground shall crush the Council. This is going to happen sooner or later. Why not do it on your own now ? The destruction of the Council will secure the defense of Pakistan and the Gift of TAPI Pipeline will usher Pakistan to prosperity.
@Sonya: "The Asian Development Bank (ADB), in a report released recently has said that Pakistan’s economy faces a major hurdle in the shape of its domestic energy crisis and that losses arising from power and gas shortages only held down GDP growth by 3–4 per centage points in FY2011 and FY2012. Depriving us of $7B !!!!???? of GDP annually. Does it make sense to you?"
Let me restate my position and address your post: 1. I have never said that Pakistan does not have an energy crisis - because clearly it does. 2. I have also not provided any opinion on whether Pakistan SHOULD or SHOULD NOT go ahead with IP pipeline. 3. I am simply questioning the financial and operational feasibility of the project using supporting facts, The ADB source you quoted does nothing to address the questions I raised, nor does it state that IP is the best way to meet the energy shortage amongst available options such as TAPI pipeline, Thar coal, imported coal, Kalabagh dam etc. 4. The other point I was making in my earlier post is that the government has no intention to go ahead with the pipeline due to the associated operational and financial issues and is simply using this as a leverage to extract more money from the Americans. This is my opinion and it is possible for you to differ without making it sound like I am some dimwit who is unable to comprehend simple facts.
Pakistan is under pressure from the US not to undertake the project. Pakistan is also not serious and thus using dilly dally tactics to waste time. The project which was conceived in mid-90's at a cost of less than two billion dololars is now costing about seven billion dollars. Ultimately, the project will be discarded by Pakistan for one reason or another to please america.
@ayesha_khan: The Asian Development Bank (ADB), in a report released recently has said that Pakistan’s economy faces a major hurdle in the shape of its domestic energy crisis and that losses arising from power and gas shortages only held down GDP growth by 3–4 per centage points in FY2011 and FY2012. Depriving us of $7B !!!!???? of GDP annually. Does it make sense to you?
"The project, which is estimated to cost between $1.5 to $1.8 billion, was proposed in the 1990s"
This is a vast underestimation of the total cost. The actual cost will be over $6B for the project. Anyway, I don't think Pakistan is serious about this project since it very well knows that it can't raise any capital for it. The establishment keeps making empty shouts about the Iran pipeline project in the hope of gaining leverage against the US to extract more money.
If we don't build it we pay penalties. If we build it we get hit by sanctions - classic diplomacy by our thinkers.
@Shahid: "Let the iranians build the gas pipeline in Pakistan also as they have completed thier side. once the pipeline is build and gas starts flowing it would be over."
If Pakistan does not have the ability to pay to build the pipeline, will it have the ability to pay for the gas? This is a question that Iran is sure to ask itself while determining whether it should finance the pipeline. One more point, this pipeline is to be built in Balochistan. Given the disturbed situation in the state, is it operationally feasible to build the pipeline even if financial closure were achieved?
Pakistan should proceed with project what ever pressure comes its way. Its matter of our survival. Its our people who are suffering and American don't give at any importance. They act on their own national interest so we should bother about them. Pakistan is much stronger and wealthier to handle this pressure and cost. Long Live Pakistan.
Let the iranians build the gas pipeline in Pakistan also as they have completed thier side. once the pipeline is build and gas starts flowing it would be over.
Financing? Russians and Chinese have backed out. National Bank Of Pakistan also does not want to be involved. The government knows there is no way to build the pipeline in the near term. It just thinks that talking about this brings some leverage to US-Pak negotiations. To an xtent - yes, the recent WB loan to energy sector is probably a direct result. But I think Pakistan is overestimating the leverage it has.
We lived and are living in fool's paradise.
Pakistan is looking for that messiah to rub the nose of the Uncle Sam and extract more dollars or civilian nuclear deal or whatever. In a global village and era of global interdependence on each other no sane corporation or government will put up the money against US embargo and expose itself to punitive actions of US. It is unfair to the investors and shareholders and this is not how the business is conducted in the sane world. Cuba, Venezuela, Libya. North Korea and Iran despite having tons of money or ideologue have tried in the past in vain. Especially, going by the state of economy of Pakistan and by the history it is clear that in the long term government of Pakistan will be asking for loan forgiveness on this investment. A banker in the New York firm will say "either put up (your own money) or shut up".