Punjab CNG stations to dry up for 3 months

Pakistan asks Iran for $2 billion in financing gas pipeline project.

ISLAMABAD:

Plagued by a chronic energy crisis, the government has decided to shut down all compressed natural gas (CNG) stations in Punjab from November to January to ensure supplies to consumers during winter.

Many people have converted their cars to run on CNG, depending on it as a cheaper alternative to petrol and diesel. “Domestic consumers are our first priority during the winters, so there will be no gas for motor transport in Punjab,” Petroleum Minister Shahid Khaqan Abbasi told AFP.

The minister also disclosed that Pakistan has asked Iran for $2 billion in financing to build its side of a gas pipeline that has drawn threats of US sanctions.

The Iranian side of the $7.5-billion project is almost complete, but Pakistan has run into repeated problems paying for the 780 kilometre section to be built on its side of the border.

The minister said the preparatory work was complete, but they had asked Iran to provide $2 billion for the construction work.

“All these issues will be discussed in a meeting which we have requested, but so far there is no reply from the Iranian side,” Abbasi said. “They were busy in cabinet formation and I hope that this meeting will take place within this month.”



It is the latest setback to hit the long-delayed section of the pipeline that would link the two neighbours and help ease Pakistan’s debilitating gas shortages.

US officials have warned that the project would risk triggering sanctions aimed at Iran.

But Abbasi denied coming under pressure from Washington since Prime Minister Nawaz Sharif came to power in the May general election. “Americans have not so far talked about this pipeline with us at any level,” he said.

Asked if Pakistan was hoping to complete the project before the December 2014 deadline, Abbasi replied: “Anything is possible, if we have the resources.” “It depends on the financing and availability of the machinery,” he added.

Iran has the second largest gas reserves in the world but has been strangled by a Western embargo that has seen its crude exports halved in the past year.

It currently produces around 600 million cubic metres of gas per day, almost all of which is consumed domestically due to lack of exports. Its only foreign client is Turkey, which buys about 30 million cubic metres of gas per day.

Published in The Express Tribune, October 9^th, 2013.