ISLAMABAD: Security agencies are reported to have conveyed to the government their concern over a proposed aerial survey by foreign consultants of $3 billion Iran-Pakistan gas pipeline’s Gwadar to Multan and Nawabshah route.Informed sources said on Friday these agencies had told the ministry of petroleum and natural resources that it should have sought security clearance before taking the decision for the survey, particularly in Balochistan, because such a job to be done by foreign consultants could compromise national interests.
An official said that under the petroleum policy and other rules aerial survey for the identification of minerals and oil and gas deposits should be done by the Geological Survey of Pakistan in coordination with security agencies.
“Aerial survey of Balochistan by a foreign consultant would be the last thing the security establishment would allow to happen,” he said.
The companies associated with Sui gas were planning to complete the physical survey of the pipeline route in 8-10 months but the petroleum ministry decided to award the contract for survey and Front End Engineering Design (FEED) to a foreign consultant in joint venture with the National Engineering Services of Pakistan.
When contacted, Interstate Gas Company managing director Hilal A. Raza said he was not aware of security agencies’ concern.
He instead added that the government was moving quickly to award the survey and FEED contract to the German firm, ILF.
In reply to a question, Mr Raza said the aerial survey and engineering design would be done by the ILF and security clearance would be sought before the actual work got under way. He said a negotiation committee had held a meeting with the foreign consultants on Thursday to resolve some contractual issues in order to meet rules of the Public Procurement Regulatory Authority.
However, he pointed out, the contract had not been awarded yet.
An official said that the commencement of survey and FEED was being delayed because of some taxation and security-related issues, which could attract penalties from Iran, starting with about $200 million by December this year.
“The real worry is that Iran may not restrict itself to just penalty; it may demand the construction cost of the pipeline from South Pars field to Sistan,” the official said.
The completion of route survey and FEED study is a pre-requisite to hold an investor conference and start construction.
About three months ago, the petroleum ministry had decided to award a $22 million contract to a local affiliate of the German firm to carry out FEED study for about 850km piece of the pipeline to be constructed at an estimated cost of $1.25 billion.
The ILF had offered to complete the study in 18 months but was asked to reduce the time to 12 months because of the penalty clauses in the agreement for delays.
Officials said the two gas utilities – SSGCL and SNGPL – who are well versed with the pipeline route, design, terrain and other specifications of the project, had offered to jointly complete the FEED study at half the cost with local expertise and manpower and in a period of 10 months.
Under the agreement, the FEED study should be ready by December 2011 and after some other project milestones, the first flows from the pipeline should start by December 2014.