Pakistan Announces Timeline for Iran Gas Pipeline Construction

Pakistan underlined that gas imports from Iran through a multi-billion-dollar pipeline project which is now under construction would start in two years.

Pakistan’s Minister for Petroleum and Natural Resources Asim Hussain announced surveys for the project are due to be completed before October 2012 and construction can start as early as December 2012. The pipeline will start supplying 750 million cubic feet of gas per day (MMCFD) starting from December 2014, he added.

He said that the project is continuing as per schedule and the work on detailed route survey and the final front end engineering design is scheduled to be completed in September 2012. Adding that pre-award procurement activities of long head items such as pipelines, and compressors have already been started.

Pakistan’s Minister for State Shahnaz Sheikh said that access has been imposed on petroleum product prices to collect additional revenues for the IP project.

Demand for natural gas has outstripped supply in recent years, putting existing reserves under immense pressure.

The total consumption of natural gas in the country stands at 3480 MMCFD million cubic feet per day of which the power sector consumes 959 mmcfd, with 747 mmcdf being consumed in the domestic sector. Meanwhile 578 mmcfd of gas is consumed by the fertilizer industry, four mmcfd by the cement industry. While 107 mmcfd is consumed commercially. 327 mmcfd is consumed by CNG cylinders which are widely installed in locally manufactured vehicles in Pakistan.

The 2700-kilometer long pipeline was to supply gas for Pakistan and India which are suffering a lack of energy sources, but India has evaded talks. Last year Iran and Pakistan declared they would finalize the agreement bilaterally if India continued to be absent in the meetings.

According to the project proposal, the pipeline will begin from Iran’s Assalouyeh Energy Zone in the south and stretch over 1,100 km through Iran. In Pakistan, it will pass through Baluchistan and Sindh but officials now say the route may be changed if China agrees to the project.

The gas will be supplied from the South Pars field. The initial capacity of the pipeline will be 22 billion cubic meters of natural gas per annum, which is expected to be later raised to 55 billion cubic meters. It is expected to cost $7.4 billion.