ISLAMABAD: China’s largest integrated energy firm, China National Petroleum Corporation (CNPC), may become an investor and contractor in Pakistan’s three major gas pipeline projects and enter into country’s oil and gas exploration and development sector.

A senior delegation of CNPC is currently in Islamabad studying various options and financial implications of the three pipelines, having total estimated cost of around $15 billion. These pipelines include Gwadar Port to Nawabshah, Karachi to Lahore (North-South pipeline) and the trans-border Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline.

Wang Shihong, who is a member of the board of directors and assistant president of CNPC, had a meeting with team of the Ministry of Petroleum and Natural Resources, led by Federal Minister Shahid Khaqan Abbasi, to examine investment opportunities.

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With total revenues at $430bn and total assets at $480bn as of end-June 2014, CNPC is the China’s state-owned corporation and parent organisation of PetroChina, the world’s fourth largest company by revenue.

The visit of the Chinese delegation was a follow-up of a recent meeting of Yan Lijin of the National Development and Reforms Commission of China with Prime Minister Nawaz Sharif.

Minister Abbasi explained financials of the three pipelines, namely Gawadar-Nawabshah pipeline being taken in hand with the assistance of Chinese leading pipeline firm China Petroleum Pipelines (CPP), North-South Pipeline with the support of Russia and the TAPI gas pipelines whose groundbreaking would be performed next month.

He said the government-to-government agreement was signed recently by the governments of Pakistan and Russia and the Russian side “expressed willingness to collaborate with the Chinese companies to achieve early completion”. He encouraged the CNPC to be part of all the three pipelines.

In addition, the CNPC was offered to be part of industrial parks under the China-Pakistan Economic Corridor and take part in exploration and production of oil and gas independently or through forming in and forming out options with state-run firms, Oil and Gas Development Company (OGDCL) or Pakistan Petroleum Limited (PPL).

“We are ready to award petroleum concession blocks to CNPC without going through the bidding process under G-to-G arrangements,” the minister was quoted as offering to the Chinese delegation, adding the government would encourage the CNPC to also set up steel mills in one of the industrial parks, preferably Gadani.

Informed sources said Mr Wang would have detailed briefings with state-run Pakistani firms and showed interest in upstream exploration, investment in petroleum manufacturing, development of pipelines, upgradation of existing petroleum infrastructure and technology and petro-chemical areas.

The delegation was told that the government was pursuing a multi-pronged strategy to meet the country’s growing energy needs and relevant policies were advancing attractive incentives for investors to pump in their resources for good profits.

An official statement said the delegation was told that Pakistan’s success ratio for exploration of hydrocarbon resources was high, thus the CNPC could inject investment into upstream oil and gas sector.

The minister offered offshore exploration sector for investment which, he added, was still lying unexplored.

Mr Wang briefed Pakistani side about the company’s profile, saying it was running 91 oil and gas projects in 35 countries and was interested to enter Pakistan’s energy sector, including oil and gas exploration, production, oil and gas field development, manufacturing steel pipelines, process plants, oil refinery equipment, laying gas pipelines, etc.

Published in Dawn, November 4th, 2015

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