15 May 2004	Saturday	24 Rabi-ul-Awwal 1425

ISLAMABAD, May 14: Pakistan plans to inform Iran, Qatar and Turkmenistan by December this year as to which pipeline project it wanted to develop first for import of natural gas, Dawn has learnt.

Official sources told Dawn that the government has firmed up its gas demand and supply projections for the next two decades and it was time to start planning to meet the demand of about 600-700 mmcfd of gas by the year 2010 and about 3-4 bcfd by 2025.

"We would not wait for India to join any project. It (India) might have its own priorities and we have to plan according to our own needs," an official source said adding the industry people believe India is the future market for gas and Pakistan would benefit economically on that front.

The sources said a delegation of Crescent Petroleum of Sharjah that visited Islamabad this week to pursue its plans to construct $1.8 billion Gulf South Asia (GUSA) gas pipeline from Qatar's North field to Jiwani in Pakistan (about 1140 km) was briefed on the matter.

The Crescent delegation led by its project director for the pipeline Mohammad E. Makkawi and comprising its legal and other technical members held discussions with ministers for finance, petroleum and senior officials of the foreign office to finalize a gas supply and purchase agreement (GSPA).

All discussions have been completed on the GSPA and it was now up to the government whether or not it wanted to sign an agreement with the consortium of Crescent Petroleum and Qatar, the sources said.

They said the Qatar pipeline was ahead of other pipeline options as far as the feasibility of the project is concerned, its draft GSPA has been developed and negotiated by the parties but Pakistan will need to look into economics of the project on a long term basis.

The feasibility study of the Qatar to Pakistan gas pipeline as well as its engineering design is ready and under consideration of the government based on concrete knowledge of the routes, design and size of the pipeline. The tariff issues would be finalized when Pakistan firmed up its plans as to when, and how much gas it required in the initial years and with what pace the requirements would go up.

Pakistan had originally planned to lay a pipeline by the year 2000 but delayed it owing to a couple of domestic gas discoveries that have now been developed and being made part of the existing system.

Now the government has taken the view that despite the development of discovered resources and the potential of newdiscoveries by 2010, the country will again begin to face gas shortfalls and necessitate at least an import plan because gestation period of most of the local projects is around 5-6 years. "So a decision has to be taken today to meet the shortage in 2010," the officials said.

The GUSA representatives, the sources said, have told the government that because of offshore route of the Gusa pipeline, its long-term security of gas supply to Pakistan was higher without any extra cost. The project would take about two years to reach financial close stage and another three years to construct the pipeline.

Qatar, the source country of gas has proven its ability to complete mega gas projects on time as they have demonstrated in $60 billion investment in its gas sector so far. Its North field is the largest single non-associated reservoir in the world with proven recoverable reserves exceeding 900 trillion cubic feet (TCF).

The sources said the offshore pipeline technology has advanced in past 10-years and has rendered the cost of offshore pipeline competitive with that of onshore technology.