Chinese firm awarded IP pipeline work

30 June 2016, Week 25 Issue 599

An unnamed Chinese company is expected to start laying one of the final sections in the Iran-Pakistan (IP) gas pipeline within the next couple of months, a senior Pakistani government official said this week.

In an exclusive interview with the Islamic Republic News Agency (IRNA), Oil and Natural Resources Minister Shahid Khaqan Abbasi said this phase of the pipeline’s construction was slated to be finished by the end of 2017.

This section will follow a north-northeasterly route through Pakistan from the deepwater port at Gwadar to Nawabshah City, leaving a further 80 km of pipework – west from Gwadar Port to the Iranian border – to complete Pakistan’s 700-km portion of the 1,800-km infrastructure.

The strategically important Gwadar-Nawabshah LNG terminal and pipeline project will link to Iran’s gas network and help avert energy shortages in Pakistan, which currently has around 12 hours per day of power cuts and can only supply around two-thirds of its gas needs.

According to the Iranian daily newspaper, Financial Tribune, Abbasi said Pakistan was still interested in completing the pipeline and its contract with Iran remained valid, without Iran demanding any penalty payments in relation to delayed completion of the project, which began six years ago.

Originally launched in 2010 with a planned delivery of first gas in 2014, progress at the Pakistan end of pipeline has been held up, reportedly as a result of US sanctions on Iran causing funding to dry up in Pakistan. Iran, however, has managed to build 900 km within its territory.

“In spite of the existing problems in the implementation of IP gas pipeline caused by sanctions, Pakistan is taking steps forward. However, these issues must be resolved,” Abbasi was quoted as saying.

Briefing foreign diplomats on Pakistani mega projects on June 13, Abbasi said the pipeline would be completed in 2018 with approximately 250 million cubic feet (7.08 million cubic metres) per day of gas delivered in the first year. During the second year this would be ramped up to 500 mmcf (14.16 mcm) per day, with a further increase to 750 mmcf (21.24 mcm) in the third year.

Edited by

Andrew Kemp

Editor

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