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LAHORE: Disinterest shown by the finance ministry on provision of sovereign guarantees to the financial institutions has delayed the mega project of laying another gas pipeline from Karachi to Lahore.

Since the finance ministry is yet to provide a sovereign guarantee, the approval of the project is still lying pending with the Economic Coordination Committee (ECC) of the Cabinet for the last six months. After approval of the project by ECC, the Oil and Gas Regulatory Authority will accord the final approval in this regard.

The government in January had decided to import further 1,200 million cubic feet per day (mmcfd) of liquefied natural gas (LNG) to meet increasing gas demand of all sectors. It had also directed the Sui Southern Gas Company Ltd and Sui Northern Gas Pipelines Ltd to immediately start designing and planning works in this regard.

Under the plan, another gas pipeline measuring 1,100km for supplying 1,200mmcfd of LNG to Sindh and Punjab, after re-gasification at the Port Qasim, was to be laid from Karachi to Lahore on a fast-track in about one year.

At present, the 600mmcfd is being imported and supplied to Punjab. Similarly another 600mmcfd of LNG is likely to be supplied to Punjab within next couple of days after regasification at the second LNG terminal built in the private sector recently.

“Actually the project has been delayed due to the Ministry of Finance that is yet to provide sovereign guarantee for financing the project through bank loans. For the last many months, the project’s approval is lying pending with the ECC. Neither the finance ministry provided guarantee nor the ECC accorded approval,” a senior SNGPL’s official told Dawn on Tuesday. He termed the sovereign guarantee from the finance ministry a vital in connection with arrangement of funds for the project worth Rs160bn approximately.

The gas pipeline project comprises two portions—Karachi to Sawan gas field (section-1) in Khairpur district and from Sawan to Lahore (section-2). The section 1 and 2 under the plan are to be launched and completed by SSGC and SNGPL, respectively.

Published in Dawn, December 20th, 2017