MCCI calls for expediting work on Iran-Pakistan gas pipeline

TEHRAN,Nov. 16 (MNA) -- Multan Chamber of Commerce and Industry (MCCI) Sunday urged the government to explore new gas reserves and expedite work on Iran-Pakistan gas pipeline and complete it as early as possible to run the local industry as Pakistan can not afford two months' suspension of gas in the winter season. In a statement issued, here on Friday, MCCI president, Anis A. Sheikh said that the Iranian government has already completed its part of the project and if Pakistani authorities show some interest, the pipeline could be completed much earlier than the stipulated period. He stressed that the severest-ever shortage of gas in the country calls for extraordinary measures on war footing and the people sitting at the helm of affairs should gear up their efforts for the early completion of the project. According to the project proposal, the pipeline will begin from Iran's Assalouyeh Energy Zone in the south and stretch over 1,100 km through Iran. In Pakistan, it will pass through Balochistan and Sindh but officials now say the route may be changed if China agrees to the project. The gas will be supplied from the South Par field. The initial capacity of the pipeline will be 22 billion cubic meters of natural gas per annum, which is expected to be later rose to 55 billion cubic meters. The project is expected to cost $7.4 billion. Sheikh said, "Multan chamber has credible reports that the work on this multi-million dollar project is stalled for unknown reasons. It is unable to understand the causes of the delay in this highly beneficial project of national importance when the gas pricing formula has already agreed to in 2009 and Tehran and Islamabad have inked a final agreement to launch the project by spring 2014." He said that the government should take the business community in general and MCCI in particular on-board, as the gas shortage in Punjab is severest, while there is no shortage in other provinces. This way, industrialists who are planning to shift their operations to other countries could be asked to shelve their plans. He observed that there is huge number of industries where the gas is basic raw material and due to its acute shortage there would be no work in these units while the graph of unemployment would go up further. He further said that if the federal government takes the private sector on-board on this mega project, it would not be adding any cost to it but definitely ensure its early completion. MCCI president pointed out that the reports about suspension of work on the IPP project has sent a very wrong signal to the private sector that needs to be corrected by restarting the work project so that the sector could be able to do their businesses with peace of mind. --- Pakistan to renegotiate IP gas pipeline deal Pakistan has decided to re-negotiate $1.2 billion Iran-Pakistan (IP) gas pipeline deal with Iran under price mechanism settled under Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project. “Pakistan will save $100 billion during the period of next 25 years due to two gas pipeline projects Iran-Pakistan (IP) and TAPI,” Petroleum Minister Dr Asim Hussain said while addressing a press conference here on Sunday. The saving has been estimated by comparing the price of furnace oil with the price of gas imported from Iran and Turkmenistan. Imported gas will be utilized predominantly in the power sector which is currently using furnace oil. “The contract of IP gas pipeline has the provision to re-negotiate the gas price if Pakistan is able to get alternative source of supply at cheaper rate,” Hussain told The Express Tribune adding that Pakistan and India will hold dialogue on the transit fee in December this year. Pakistan has already signed Gas Sales Purchase Agreement (GSPA) with Iran by linking price of gas with 78 per cent of crude oil. “In case of TAPI gas pipeline project, gas price will be linked with 70 per cent of crude oil,” Hussain said, adding that Pakistan has decided to renegotiate with Iran because of this. Pakistan and Turkmenistan are scheduled to make an initial signing of the Gas Sales Purchase Agreement (GSPA) on the TAPI project during President Zardari’s two-day visit of Turkmenistan which starts today (Monday). Dr Asim Hussain said that gas situation in the country will be normalized by the end of 2013. “gas shortage next year will be less critical as 500 million cubic feet per day (mmbtu) imported Liquefied Natural Gas (LNG) will enter the system from third quarter of next year. “During current month gas shortfall is expected to be 529 million cubic feet per day (MMCFD), in December 911, January 1,127, February 1,046 and 762 mmcfd in March next year”, he said adding that the month of January is very critical. “That is why the government has decided to review the gas shortage on a monthly basis,” he said. He said that the country would have an additional 200 mmcfd gas in system out of which 100 mmcfd gas will come from Kunner-Pasakhi, 60 mmcfd from Sui gas and Qaderpur gas field. Some gas discovery is also expected from small fields. Under gas load management plan approved by the Economic Coordination Committee (ECC), Compressed Natural Gas (CNG) and industrial sector will face three days of gas loadshedding in a week. “Gas supply to the fertilizer sector will be cut on a rotational basis,” he said adding that the fertilizer sector would decide the mechanism for this. While replying to a question Dr Asim Hussain said that during the next four to six months smart meters will be installed in the commercial sector and that 1,100 such meters had already been installed in Sindh.