ISLAMABAD: Following a government decision for fast track construction of 710km gas pipeline from Gawadar to Nawabshah early this month, a Chinese delegation is visiting Pakistan with interest to be part of the pipeline project and related Liquefied Natural Gas (LNG) infrastructure.

The delegation, led by Li Tong, Chief Executive Officer and Chairperson of Bank of China International, had a meeting on Tuesday with Petroleum Minister Shahid Khaqan Abbasi to look into investment opportunities arising out of proposed LNG imports and pipeline construction.

The delegation also included representatives of China Tianrui Group, Metallurgical Corporation of China, BOC International Holdings Limited, GCL-Poly Energy Holdings Limited and Shandong Hi-Speed Group Co.

The delegation will remain in Pakistan until end of this week and hold follow-up meetings and explore investment opportunities.

The delegation was given a presentation by the minister on overall energy sector, its ongoing projects and the upcoming projects.

The delegation was informed that facing severe energy shortages, the government had taken up improving energy supplies as its top-most priority and was proactively striving to facilitate projects and investments.

He said the government had initiated a number of new projects in the energy sector, including import of LNG, installation of re-gasification terminals and laying down new pipelines for transportation of fuel from the southern ports to the upcountry.

He also appraised the delegation of opportunities available in oil and gas exploration and establishment of oil refineries in Pakistan’s coastal areas and benefits attached with it.

The visiting Chinese delegation appreciated Pakistan’s investment-friendly regime and showed keen interest to invest in the energy sector of Pakistan.

The delegates expressed their resolve to capitalise from the investment opportunities offered by the government, especially in the projects linked with the import of the LNG. The delegates also showed interest in the mineral sector of Pakistan.

On Oct 2, the Economic Coordination Committee (ECC) of the cabinet had approved ‘fast track’ construction of 710km Gwadar to Nawabshah gas pipeline and LNG terminal at Gwadar port as an alternate plan to facilitate Iran-Pakistan pipeline and transport liquefied natural gas (LNG).

The Gwadar to Nawabshah pipeline, with 42-inch diametre shall be laid along with two compressor stations. The terminal will have the capacity to handle up to 500 mmcfd of gas.

Interstate Gas Systems (Pvt) Limited (ISGS) will be authorised to execute the implementation of the project. The committee also directed the Ministry of Petroleum and Natural Resources to finalise the funding plan preferably on government-to-government basis or build, operate and transfer or build, own, operate basis.

The government had decided to lay the pipeline from Gwadar to Nawabshah in Sindh “as an alternative plan” in view of international sanctions working against Iran-Pakistan Gas Pipeline, according to petroleum minister Abbasi who said Pakistan could face penalties from Iran under the bilateral gas agreement beyond Dec 31 due to failure in implementing the project but Islamabad had issued a notice of force majeure to Iran because of circumstances beyond Pakistan’s control, like US sanctions against Tehran.

The Gwadar to Nawabshah pipeline would suggest Pakistan’s seriousness to implement the pipeline project that Pakistan required at all costs to link Gwadar with the gas system in Sindh and the rest of the country.

This would leave about 70km of pipeline segment between Gwadar and Iranian border which could be constructed immediately whenever international sanctions are lifted against Tehran. Companies from Japan, Russia and Turkey have also shown keen interest to participate in this project.

China seemed to be the strongest contender for Nawabshah-Gwadar pipeline given the geo-strategic environment and China’s overwhelming role in the development of Gwadar port and export processing zone.

The ISGS had been directed to complete tendering and agreement signing process within two months so that the pipeline was ready by November 2015.

Published in Dawn, October 15th , 2014