Russia has offered technical support to Pakistan for laying Iran Pakistan (IP) gas pipeline in recent contacts between the top leadership of the two countries, official sources told Business Recorder. The execution of the project seems apparently uncertain after a row among Iran, Europe and United States of America (USA) intensified due to Iranian nuclear program, which the latter is not ready to abandon.
When contacted, Minister for Petroleum and Natural Resources Dr Asim Hussain confirmed to Business Recorder that Russian leadership is keen to extend technical support to Pakistan for laying the pipeline. He said that Russia has not offered any financial assistance for the project as Pakistan is arranging funds from its own resources.
When asked that if the row between Iran and West, backed by the USA, might intensify due to Iran's nuclear program, what would be the future of IP line, he said that in case of 'unprecedented sanctions', as is threatened by France, Pakistan has to follow international obligations. The government has already decided to impose a separate levy on gas consumers with the name 'Gas Infrastructure Development Cess Bill 2011' across the board for development of new infrastructure projects.
The Senate recently cleared the proposals of the Ministry of Petroleum and Natural Resources despite some reservations from the opposition. The government is expected to collect Rs 38 billion from petroleum levy and gas infrastructure development cess Bill 2011.
Pakistan is facing acute energy crisis and the government is pursuing multi-pronged strategy to meet the demand-supply gap. Natural gas had a dominant role in the country's primary energy mix with a contribution of about 48 percent. Projected demand-supply position of natural gas is as follows:
In 2011-12 supply is 4,172 mmcfd against demand of 5,777 mmcfd, showing a shortfall of 1,605 mmcfd. In 2012-13, supplies will be around 4,372 mmcfd, whereas demand will be 5,995 mmcfd, indicating shortfall of 1,622 mmcfd. In 2013-14, shortfall will be 1,880 mmcfd, followed by 2,495 mmcfd in 2014-15, 3,038 mmcfd in 2015-16, 3,542 mmcfd in 2016-17, 4,000 mmcfd in 2017-18, 4,424 mmcfd in 2018-19, 4,799 mmcfd in 2019-20 and 5,247mmcfd in 2020-21. The shortfall is widening mainly due to natural depletion of existing resources and increase in demand through addition of new consumers.
The income to be generated from the two levies will be spent on IP pipeline project, Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline project, LNG projects and LPG supply enhancement projects in both public and private sectors. IP pipeline project will bring in 750 mmcfd gas, the first gas flow of which is expected in 2014. The project involves construction of 781 km gas pipeline from Iran-Pakistan border to Nawabshah to inject the gas into transmission system of the two gas utility companies. Estimated cost of the project is $1.250 billion (Rs 108 billion).
The TAPI pipeline project will bring in 1,325 mmcfd gas, first gas flow of which is expected in 2016. The project involves construction of 1,680 km gas pipeline from Afghanistan-Pakistan border to Multan to inject gas into transmission system of the two gas utility companies and onward flow to Pakistan-India border. Estimated cost of the project is $7.600 billion (Rs 654 billion). Share of each country will be determined later.
LNG import, both in public and private sectors, and LPG supply enhancement projects through local production and imports and supply of synthetic natural gas (SNG)/LPG air mix to the localities where pipeline gas supply is otherwise not economically feasible are also being entertained.
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