Thursday, November 17, 2011

#Russia #IP Gas Line :Russia Keen To Lay IP Gas Line In Pakistan

Pakistan will renegotiate the gas price with Iran under the IP gas pipeline project in 2013, one year before the said project comes on stream on December 31, 2014.

Pakistan will be able to save $100 billion in the next 25 years if the government manages to bring down the price of Iranian gas by 10 percent, Dr Asim Hussain, Federal Minister for Petroleum and Natural Resources disclosed in a press briefing on Sunday. Pakistan will bring down the price by 10 percent from the price that Tehran and Islamabad had finalised under the GSPA to the price offered by Turkmenistan under the TAPI gas line project.

Two years ago, the gas price was finalised at 78 percent of crude price for import of 750 million cubic feet per day (mmcfd) gas from Iran. “Turkmenistan has offered gas price at its border at 50 percent of Brent,” Dr Asim said, elaborating on the price of gas to be imported from Turkmenistan.

“Both sides have decided the basic parameters of the pricing formula for gas to be imported under the TAPI gas line, but the GSPA (gas sales purchase agreement) has not yet been finalised and once the transit fee to be charged by Afghanistan is decided, the price will be finalised.”

To a question, the minister explained that Pakistan would ensure the 28:78 equity ratio in the investment of laying down the IP gas line and to this effect Russia had shown keen interest in laying the portion of the IP gas line in Pakistan.
He said that financial advisers would soon be appointed to ascertain how much investment Pakistan needed to ensure the IP gas line. “We are going to impose gas infrastructure surcharge to ensure financing for the laying of TAPI, IP gas lines and LNG pipeline from Karachi to Punjab,” he said, adding that a Gas Development Surcharge was being given to the provinces under the NFC Award and was the main reason the federal government wanted to impose the gas infrastructure surcharge.

Speaking about gas load management in the winter season, the minister reiterated that the plan to manage the gas load would be finalised on a monthly basis. He said a three-day gas holiday in the CNG sector and three-day gas closure for the industrial sector would be ensured in the winter season. If the supply side is improved, he said, the provision of gas to both the CNG and industrial sectors would be reviewed accordingly.

In the month of November, the country will face gas deficit of 529 mmcfd while in December 911 mmcfd and in January the deficit will touch 1.127 billion cubic feet per day (bcfd). The gas deficit in February will be at 1.046 bcf and in March would tumble to 762 mmcfd.

He said under the agreements, the industrial sector was entitled to gas only for nine months a year and was not supposed to get gas in the winter season, but the government wanted to provide gas to the industrial sector keeping in view the importance of the sector to the economy.

The minister said the power sector would be provided 76 million cubic feet per day (mmcfd) and the fertilizer sector would get 90 mmcfd. To a question, he said the domestic sector enjoyed top priority in terms of gas availability during the winter season and the government would ensure that it did not suffer in the winter season. “We need to learn how to share the gas deficit with patience,” the minister said.

He termed Article 158 of the Constitution one of the main reasons for the gas crisis in the Punjab as under this article, gas producing provinces have the first right to cater to their energy needs and only if they have surplus gas it will be transported to the federating units where gas is not available in abundance.

“We are vigorously working on the import of LPG and LNG and for the exploration of tight and shale gas to cater to the future needs of the country,” the minister said, adding that in the past, tight and shale gas had remained untapped but the government had now decided to explore these resources. According to one estimate, Pakistan is rich in shale gas and has 76 trillion cubic feet reserves of it, three times more than the existing gas resources.

The minister said the OGDCL had also stepped up its exploration activities in Zin block in Balochistan and so far OGDCL had drilled the well as per schedule and with good results. He said if OGDCL manages to succeed, the gas at Zin would erase the existing gas scarcity. To a question, the minister said the issue of circular debt would be resolved in the current month.

Russia keen to lay IP gas line in Pakistan: Dr Asim