Although the cross border natural gas pipeline
projects from Turkmenistan and Iran are moving at snail's pace yet they
are getting close to the final touches, however, the slowdown in
finalizing the projects is causing cost escalation from $3 to $4 billion
in due course of time.
It is learnt that Turkmenistan has provided the
required detailed about the availability of the gas and assurance for
sustainable supply of the gas to Pakistan. The Asian Development Bank (ADB)
is convinced to provide funding for feasibility of the project.
On the front of other project from Iran, the recent
visit of Prime Minister Zafarullah Khan Jamali has helped in pushing up
the project in which Pakistan has presented a viable proposal for
reduction of the cost of the project.
The import of natural gas is extremely significant
for economic growth of the country, the multinational oil and gas
exploration companies engaged in Pakistan are however have their
reservations and seem unhappy over the import of gas from other
countries. They are of the view that the pipeline projects could be a
success story provided India participates in this projects which is a
energy starved country and could be a potential buyer of natural gas at
a massive scale.
Iran has offered Pakistan to study the feasibility of
laying a Pak-Iran gas pipeline, since India is unwilling to be part of
the project. Iran had asked Pakistan that the gas line might be laid
between the two countries. Pakistan would study the proposal and see if
it was viable for Pakistan. Pakistan currently produces around 3.4
billion cubic feet of natural gas per day and has estimated gas reserves
of around 42 trillion cubic feet. Though Pakistan is currently able to
meet its gas requirement from own resources, India direly needs the gas
for its industrial and domestic use. As a result of recent visit to Iran
by Prime Minister Mir Zafarullah Khan Jamali, the two countries would
sign an agreement sometimes next month to have greater cooperation in
the field of CNG. In this respect, Hydro-Carbon Development Institute of
Pakistan would be assisting and provide technical expertise to the
Iranian Oil Ministry on the building of a network of CNG stations in
Iran. Pakistan will also provide cooperation to Iranian Authorities for
the promotion of CNG industry in Iran.
Recently, a 10-member delegation of Iranian officials
visited Pakistan to explore this area and wanted to gain from Pakistan's
experience. Pakistan is one of the largest countries, using CNG as
substitute fuel, and Iran can benefit from Pakistanís expertise in this
sector. There are strong possibilities that the two countries join hands
in various ongoing development activities in the oil and gas sector of
Pakistan including on-shore and off-shore exploration, regional pipeline
projects updating of refineries.
In order to consider the offer extended by friendly
country Iran, Pakistan will soon table a new proposal to build a gas
pipeline between the two countries. The objective behind importing gas
from Turkmenistan as well as from Iran is to reduce cost of installation
to half, helping the demand for the gas in Pakistan.
The main thrust of the said proposal is that the
countries which would share the gas pipeline, will construct their own
respective areas to build a system of gas transmission.
It would help eliminating the guarantees and
conditions attached to this gas pipeline. But still have some weak
footing because of insecurity and law and order situation in Afghanistan
hindering pipeline to be laid from Turkmenistan.
If the Iranian government agrees on installing gas
pipeline to their respective borders, Pakistan would lay infrastructure
near its borders, distributing gas to the respective areas.
This plan will reduce the cost of the gas pipeline to
nearly half. Preliminary estimates show that the cost of gas pipeline
project would be around $4 billion.
The gas demand in Pakistan is expected to grow by 6-8
percent due to increase in consumption of existing consumers and
addition of new consumers through an aggressive network expansion
program. The total demand is expected to increase from 1,019 million
cubic feet per day to over 1,596 million cubic feet per day by 2007-08
due to a shift from oil because of price advantage. Industries,
commercial and domestic consumer demand will also show volume increase
of 23 percent, 21 percent, and 16 percent respectively due to GDP growth
and increased gas penetration.
Transport sector is likely to grow by 150 percent
while fertilizer and cement sector demand will remain constant at 55
million cubic feet daily and 10 million cubic feet daily.
Recently, representatives from Turkmenistan, Turkey
and Pakistan had meeting on this project and now an agreement is
expected to be signed soon among the participating countries including
ADB and other stakeholders
These three countries will be forming a consortium
and then carry out a pre-feasibility study of the project for which
financial assistance is being provided by Asian Development Bank.
The proven reserves of the natural gas are sufficient
to meet the future demand of natural gas for next 25 years. However, the
increasing demand for gas as a substitute for fuel oil, it is estimated
that the country may be facing a shortfall in production of natural gas
after 6-7 years.
Currently, Pakistan has gas reserve worth 25 trillion
cubic feet, which can meet gas requirement for next 25 years. Besides
laying the cross border gas pipeline, Pakistan will also have to develop
its own resources and more efforts on off-shore and on-shore exploration
of oil and gas potentials.