ISLAMABAD, Feb 27: The Asian Development Bank (ADB) has approved a $700,000 technical assistance grant for a study to locate natural gas reserves in Pakistan in the event of supply disruptions in the planned Turkmenistan-Afghanistan and Pakistan (TAP) gas pipeline project.

According to a press release issued here on Friday the TAP Natural Gas Pipeline Project is a 1,700-kilometre pipeline that will transport up to 30 billion cubic meters of natural gas annually from the Dauletabad fields in South East Turkmenistan to consumers in Afghanistan, Pakistan, and possibly India.

The $3.3 billion project, to take five years, will begin after the countries involved and other partners have finalized various projects agreements. Underground reservoirs are proposed for Pakistan to store sufficient quantities of natural gas in case of any disruption- for example, through political action or sabotage - of supply through the pipeline.

"Gas demand in Pakistan, particularly in the north, is subject to major seasonal variations", says Najeeb Jung, an ADB Senior Energy Specialist. "During winter, gas supply is limited because of the increased demand for power generation in domestic heating. The situation is aggravated by reduced hydropower generation. Underground storage would help prevent such shortages".

Mr Ali Shah, Country Director for ADB in Pakistan notes that "The grant will identify a possible reservoir based on size, containment capacity, productivity, and location.

The short- listed reservoirs will undergo a more detailed evaluation. Other facilities needed to integrate the reservoirs with the gas infrastructure will also be evaluated".

Cost estimates and implementation schedules to develop and integrate the selected reservoirs will be prepared. The grant will also provide legal advisory services to help the governments finalize the various project agreements, and disseminate information about the project among major oil and gas transportation companies to facilitate bid solicitation.

ADB has previously financed a techno-economic feasibility study for the pipeline project, a market study on demand for natural gas in Pakistan and northern India, and a risk mitigation study on concerns of consumers in case gas supply is disrupted. This grant is a follow-up to the latter study.

The grant is due for completion in October 2004. The government of Pakistan will contribute US$125,000 equivalent toward its total cost of US$ 125,000 equivalent toward its total cost of US$825,000.

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