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December 2, 2020

Pakistan looks for financial consultant as TAPI up for grabs

Business

December 2, 2020

KARACHI: Pakistan is hiring a consultant to update financial and commercial aspects, including pricing formula, related to trans-Afghanistan pipeline that targets first gas flow in next four years, it was learnt on Tuesday.

State-owned Inter State Gas Systems (ISGS) wants international/local firms for provision of commercial consultancy services with respect to the commercial and financial aspect of Turkmenistan-Afghanistan Pakistan-India (TAPI) gas pipeline project, including gas pricing mechanism, and negotiation strategy, according to a document available with this scribe.

ISGS intends to hire services of local/international consultancy firm having experience relating to the commercial/financial terms of contractual arrangements of long-term gas import and infrastructure projects.

ISGS said on its website the TAPI gas pipeline project aims to bring natural gas from the Gylkynish and adjacent gas fields in Turkmenistan to Afghanistan, Pakistan and India. The ADB is acting as the facilitator and coordinator for the project. The feasibility study, proposed to lay a 56-inch diameter 1,680 kilometer pipeline with design capacity of 3.2 billion cubic feet of natural gas per annum from Turkmenistan through Afghanistan and Pakistan up to Pak-India border.

The intergovernmental agreement on TAPI was signed in 2010. Field-works have been completed in April 2019 with the first gas flow targeted for FY2023-24.

The consultants would review and evaluate gas price formulation and periodic pricing review mechanism in view of the global and regional historic and future developments and trends as well as develop gas pricing projections based on competitive pricing analysis, comparison with reference to other competitive fuels, global price benchmarks, flooring and capping of benchmarks etc.

The consultant would also provide a comparative analysis and provision of pricing data for existing global and regional piped gas projects and liquefied natural gas import projects, and developing proposals with supporting data for gas price negotiations with reference to gas pricing and transportation cost of the projects.

The mandate and order of work embodied by ISGS, as a public sector company, encompasses the energy security.

The objectives of ISGS are to carry on the business of import, supply, transport and sell natural gas and natural gas products through pipeline or otherwise. Significant projects being pursued by the company include TAPI, North South Gas Pipeline Project, Offshore Gas Pipeline Project and Strategic Underground Storages.

Gas accounts for more than half of Pakistan’s total energy consumption and is used for a variety of purposes ranging from cooking to manufacturing fertilisers to fuelling cars to producing electricity.

With almost a quarter of its population connected to the gas supply network, around 3 million people wait for new connections while gas companies have the capacity and resources to provide up to 400,000 connections annually.