After completing evaluation of the technical bid, the public sector Inter State Gas Systems Limited (ISGS) is likely to open the financial bid of the China Petroleum Pipeline Bureau (CPPB) for the construction the Gwadar LNG terminal along with pipeline network upto Nawab Shah this week.
An official source said after the approval of the financial bid the contract for the construction of the LNG terminal at Gwadar and laying down of 42 inches diameter, 711 kilometres long from Gwadar to Nawab Shah will be awarded to the Chinese state owned company. The company was nominated by China for the project.
The estimated cost of the project is $2.5 billion, out of which 85 percent investment will be provided by China while the remaining 15 percent will be shared by Pakistan. The Chinese company will manage a loan from China Exim Bank for the project while Pakistan will pay off the loan in 20 years’ time from the revenue of the project, the source added.
Pakistan is aggressively working on improving its gas infrastructure and imports from abroad as 50 percent of its fuels supplies are met through natural gas. The growth in demand for natural gas has outpaced the growth in supply therefore resulting in a shortfall, this leads to curtailment of gas supplies to both power and industrial sectors, especially during the peak winter months.
As per Pakistan gas supply-demand study conducted by ILF Beratende Ingenieure GmbH over the next 17 years gas demand is projected to stand at 11.73 bcfd while domestic supplies are expected to reach the level of 4.94 bcfd resulting in a huge shortfall of about 6.79 bcfd by FY 2030. The estimate is done considering the existing and planned capacity.
The Chinese company will construct the LNG terminal having a capacity to handle 500 million cubic feet gas per day with floating re-gasification and storage unit (FRSU). The gas pipeline from Gwadar to Nawab Shah will have a capacity to carry 1.5 billion cubic feet gas per day.
The pipeline will be used for importing natural gas from Iran once the international sanctions are lifted on Iran. Only 70 km pipeline will be needed to extend it to the Iranian border from Gwadar, to brand the 781 km pipeline as the Iran-Pakistan (IP) gas pipeline.
Pakistan will initially get 750 million cubic feet gas per day from Iran which will be increased up to 1 billion cubic feet gas per day. While the pipeline will get another 500 mmcgd gas per day through the LNG terminal thus enabling it to carry upto 1.5 bcfd.
The pipeline project is part of the China-Pakistan Economic Corridor (CPEC) initiative and is included in the early harvest projects. It is estimated to be completed by December 2017. Pakistani law enforcement agencies will be providing fool proof security during the construction of LNG terminal and pipeline.
