Pakistan dismisses rumors about IP gas pipeline

Pakistani Federal Minister for Petroleum Asim Hussain vehemently rejected the rumors that Islamabad is giving a second thought to its participation in the Iran-Pakistan gas pipeline project, and stressed that construction of the pipeline will be complete in two years."I don't want to give any deadline regarding completion of the pipeline project, but I can assure you (legislators) that it will be done by the end of 2013," Asim said, replying to a question during the question-hour session of the Pakistani Senate. He said work on the IP project implementation was already in progress. Pursuant to the clearance by authorities concerned, the Engineering and Project Management (E&PM) consultancy contract with ILF NESPAK JV was already in place. He said the E&PM consultant had already started work on Detailed Route Survey (DRS) and Front End Engineering Design (FEED), to be followed by bankable feasibility, study route reconnaissance, social and environmental impact assessment (SEIA) and supervision etc. The physical construction of the pipeline shall follow the completion of Bankable Feasibility Study. First gas flow was targeted by end of 2014, Dr Asim said. Route Reconnaissance survey (a part of DRS) had been completed at the end of July 2011, while the consultant was currently working on the pipeline design & Engineering (FEED) as well as feasibility study, he added. The estimated project cost of the project is US$ 1.5 billion, however this will be firmed up after completion of Bankable Feasibility study by E&PM consultant. On project financing/ construction, keen interest had been expressed by various major international investors from China, Russia and Middle East, he said, adding that initial communication/ information had been exchanged with interested parties in this regard. Further as programmed in the approved financing strategy by Steering Committee of ECC on gas import projects, the process for engaging a world class Financial Advisor (Equity and Debt arranger) was also in process. He said that EOI for appointment of financial advisor were advertised during July 2011. By cut-off date of August 20, 2011, response had been received by some strong international banking consortiums timeline for appointment process is 3-4 months. He said feasibility of the project was being prepared and tenders for compressors and pipes would be floated in a month. He said the pipeline would be laid along the coastal highway and two compressor stations would also be set up. Electricity and gas would be provided to the areas nearest to the pipeline, he added. To another question, the minister said that talks were also being carried out with Turkmenistan for gas supply and an agreement would be inked on November 15 in this regard.