Ira­nian pres­i­dent’s visit aims to push IP gas pipe­line pro­ject

The Pak Banker - - FRONT PAGE -

IS­LAM­ABAD: Fol­low­ing the lift­ing of sanc­tions, Iran Pres­i­dent Has­san Rouhani is set to visit Pak­istan by the end of this month to push for the Iran-Pak­istan (IP) gas pipe­line pro­ject. The pro­ject was to be com­mis­sioned in De­cem­ber 2014, but work was stalled af­ter sanc­tions were placed on Tehran.

Of­fi­cials now say that there are hopes that the pro­ject could be im­ple­mented. The Ira­nian pres­i­dent will take up the is­sue dur­ing his visit to Is­lam­abad, said an of­fi­cial, adding that Pak­istan had com­mit­ted to com­plet­ing the pro­ject af­ter sanc­tions are lifted. Any de­lay on part of Pak­istan in the post-sanc­tion sce­nario would re­sult in mil­lions of dol­lars be­ing im­posed as penalty, be­sides up­set­ting diplo­matic re­la­tions be­tween the two coun­tries. Iran had wanted some form of com­mit­ment from Pak­istan, which was given in the form of award­ing the LNG pipe­line con­tract. Of­fi­cials say the stand­alone pro­ject of LNG Gwadar pipe­line was fea­si­ble as the coun­try re­quired the pipe­line ca­pac­ity to pump LNG. A ter­mi­nal at Gwadar would also help to im­port LNG.

But the pe­tro­leum min­istry was fac­ing prob­lems in im­ple­ment­ing the pro­ject as the Min­istry of Fi­nance ap­pears to have spent the en­tire cess col­lec­tion from gas con­sumers in bridg­ing the bud­get deficit and is re­luc­tant to pro­vide $300 mil­lion for ex­e­cut­ing the $2 bil­lion Gwadar LNG pipe­line pro­ject, an of­fi­cial said. This comes de­spite the Min­istry of Pe­tro­leum and Nat­u­ral Re­sources hav­ing ap­proached the fi­nance min­istry to seek the re­lease of gas in­fra­struc­ture de­vel­op­ment cess (GIDC) col­lec­tion for spend­ing on planned gas im­port projects.

The fi­nance min­istry in­stead sug­gested to bor­row around Rs100 bil­lion from com­mer­cial banks. Ear­lier, gas util­i­ties were work­ing on en­hanc­ing the ca­pac­ity of their pipe­line net­works to cre­ate room for LNG trans­porta­tion. So far, Rs183.86 bil­lion has been re­ceived from con­sumers in shape of GIDC, which was im­posed in Jan­uary 2012 to fi­nance gas im­port projects. How­ever, noth­ing has been left as the fi­nance min­istry has con­sumed the en­tire amount.

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