China to back Iran-Pakistan gas pipeline project

President Asif Ali Zardari and Petroleum Minister Dr Asim Hussain remained successful in convincing the Chinese leadership during their recent visit to China to take part in the bidding for the construction of the Iran-Pakistan (IP) gas pipeline project.
An official source on Friday said after getting China’s backing, the government had extended the deadline for the prequalification of the engineering, procurement, construction (EPC) and commissioning of the 785km-long pipeline from June 8 to June 22. He said a leading Chinese firm was likely to participate in the construction of the IP pipeline.
He said it was a big achievement, as China’s participation in the project would ensure its safety, adding that Iran had already assured Pakistan of providing all the financial and technical assistance, including equipment and compressors, for the commissioning of the pipeline. The estimated cost of the project on the Pakistani side is estimated at $1.2 billion.
The 42-inch diameter gas pipeline will be transporting high pressure one billion cubic feet gas per day (bcfd) from an off-take point near Gwadar to gas integration point near Nawabshah. The country is faced with a gas shortage of 2bcfd, which is estimated to increase to 6bcfd in the next five years if new discoveries are not made or gas is not imported.
The pipeline will follow the coastal route and will be safe from any sabotage activities in Balochistan. The government is ready to offer the project, either on EPC or turnkey basis, per the prequalification document. Construction includes pipeline, compressor stations, main line block valve stations, pig launching and receiving stations, CP installations, SCADA other related equipment, installations and pipeline crossings across various nullahs and rivers including River Indus.
Earlier, a selected consortium led by Industrial and Commercial Bank of China (ICBC) and Habib Bank of Pakistan (HBL) waned away from financing the IP project after the United States issued strong statements against the project.
Pakistan was looking towards Gazprom to undertake the project but the deal did not materialise. The government has already decided to dedicate the imported gas through the IP pipeline for the power sector as power shortage is projected to increase over 11,000MW in the next few years. The government is working to starting process for setting up new independent power producers (IPPs) of 5,000MW cumulative capacity so that they should be ready for commissioning by the time natural gas starts flowing from the IP pipeline in December 2014.