TURKMENISTAN-IRAN GAS PIPELINE

 

Projects inching towards final touches

By AMANULLAH BASHAR
Oct 27 - Nov 02, 2003

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

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.

TURKMENISTAN

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.