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September 20, 2020

Govt snubs premature estimate of North-South gas pipeline

Business

September 20, 2020

ISLAMABAD: The petroleum division on Saturday ruled out any realistic estimate of the mega pipeline project spanning from Karachi to Lahore without finalising its format of execution.

“No format of execution of the project has yet been finalised as the TORs (terms of reference) and scope of the project is being worked out,” the petroleum division said in a statement. “In the absence of such information the cost of the project cannot be realistically estimated.”

In January 2015, the then government approved the north-south gas pipeline project to improve capacity of the existing gas infrastructure to transport an additional large volume of gas supplies through over 1,100 kilometres from southern to northern regions of the country.

The government is expected to start the project after the apex court directed businesses in August to pay off outstanding gas infrastructure development cess (GIDC) that is over Rs400 billion.

The petroleum division rejected the reports that Sui North Gas Pipeline Limited (SNGPL) would build the pipeline at $1 billion as against the projected cost of $2 billion.

SNGPL has recently presented an initial report to the petroleum division, proposing that it could lay 200 kilometres of pipeline with 42-inch diameter within the area of Punjab.

“The company (SNGPL) does not have technical capacity/equipment for laying pipelines beyond 42-inch diameter,” said the division. “This estimate excluded the area of the pipeline to be laid in the province of Sindh. And, it doesn’t cater for pipelines of a diameter of more than 42-inch measurements.”

The petroleum division further said the estimate doesn’t cover any specific scope and TORs of the project, “which are still being worked out by the petroleum division”.

The division also denied that it was trying to give the project to a foreign company at a high cost. The impression is “misleading and against the facts”.

“Petroleum division is considering the most optimum and cost effective option of completion of this project of national importance in the light of recently announced judgment of the Supreme Court of Pakistan,” it said.

GIDC was levied in 2011 by the then federal government. Its objective was to collect funds for different energy projects, including Iran-Pakistan and Turkmenistan-Afghanistan-Pakistan-India pipelines, liquefied natural gas import and liquefied petroleum gas supply enhancement projects.

The petroleum division in the past refuted the claim that the project was awarded to any country in a government-to-government deal.

“The ministry of petroleum is actively considering all options to launch the north-south gas pipeline and other projects by evaluating all possible options including international joint ventures,” it said then.