ISLAMABAD: The local administration in Hunza on Friday declared the next 24 hours cru

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* Petroleum minister says imported gas volume will support around 5,000MW of power generation

By Zeeshan Javaid

ISLAMABAD: The Iran-Pakistan (IP) gas pipeline sovereign guarantee agreement was signed on Friday.

The agreement was signed by National Iranian Oil Company Managing Director SR Kasaezadeh and Ministry of Petroleum and Natural Resources Joint Secretary Irshad Kaleemi.

Talking to the media after the signing ceremony, Petroleum and Natural Resources Minister Naveed Qamar said that the groundwork of the Iran-Pakistan Gas Pipeline Project would start soon, as the paper work had been completed today (Friday).

He said that the Gas Sale and Purchase Agreement (GSPA) between Pakistan and Iran was for the import of 750 million cubic feet daily (mmcfd) of natural gas with a provision to increase it to 1 billion cubic feet per day (bcfd).

“The imported gas volume was nearly 20 percent of Pakistan’s current gas production and the supply was for a contracted period of 25 years, renewable for another five years. All of the imported gas will be dedicated to the power sector,” the minister said.

Shah said the imported gas volume would support approximately 5,000 Megawatts (MW) of power generation and would result in significant annual savings compared to alternative fuels such as High Sulphur Furnace Oil (HSFO), Liquefied Natural Gas (LNG), and Coal.

“As a part of the conditions precedent (CP) to be completed by parties to make the GSPA effective, the Pakistan government was providing a ‘performance guarantee’ on behalf of the Inter State Gas Company. While all other CPs of the GSPA had been completed, the project was now ready to enter into its implementation phase. As per the current project implementation schedule, the first gas flow was targeted by the end of 2014,” he added.

The project will be funded through public-private partnership and the capital cost for the Pakistan section is estimated at $1.65 billion.

The minister added that the construction of the pipeline would also create job opportunities, vocational training and health facilities in the backward areas of Balochistan and Sindh.

While talking to Daily Times, Petroleum Secretary Kamran Lashari said that the usage of this gas would change the fuel mixture composition, which would result in a more affordable power tariff for electric power consumers.

He added that under the second phase, the country would also import 250mmcft gas per day for Balochistan. Lashari said it was time the bankable feasibility study was made and the route survey and front end engineering was conducted for laying the pipeline.

While talking to the media, the National Iranian Oil Company Managing director said that this project would enhance the bilateral relations between both countries.