Pakistan is considering generating $1.6 billion internally to fund the Iran-Pakistan gas pipeline project as it fears foreign firms may be susceptible to US pressure, Business Recorder has learnt reliably. "The government is trying to generate funds from Government Holding Company, Pakistan Petroleum Limited (PPL), National Bank of Pakistan (NBP) and some other local companies to execute the IP project," sources said, adding that SSGC and SNGPL may also contribute to funds.
The government had shortlisted a German firm "ILF" to conduct feasibility study on the gas pipeline project, but officials believe that now it would be better to award the contract to local companies such as SSGCL and SNGPL instead of the German firm which may step back any time due to US pressure.
Inter State Gas System (ISGS)''s board recently set up an ''Implementation Committee'' to move forward on the project. Sources said ISGS would ink Gas Sales Purchase Agreements (GSPAs) with SSGCL and SNGPL, a prior requirement to identify the project''s financiers. "The board of National Iranian Oil Company (NIOC) has also approved a gas pipeline deal between Pakistan and Iran," sources said, adding that Iran has conveyed this to the Pakistani government. Pakistan will depend on local oil and gas companies to generate funds of around $1.6 billion to carry out the project.
Responding to a question about funding from Iranian side for the project, officials said Pakistan would not seek funds from Iran. "By generating funds from local sources, the cost of gas will remain at reasonable level," sources said. Pakistan and Iran would be responsible for the laying of the pipeline in their respective territories. Work on the pipeline project will be completed by 2014. Work on the 900 kms pipeline in Iranian territory has already been completed whereas the work on the remaining 250 kms will be completed soon.
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