As soon as all the stakeholders agree on a price mechanism, the Pakistan government might hold dialogue with international donors to seek financial assistance

KHALID BUTT, Bureau Chief, Lahore
Dec 25 - 31, 2006

Dispelling the impression of any standoff in Iran-Pakistan-India (IPI) gas pipeline project, SNGPL Chief Executive and Managing Director Abdul Rashid Lone has assured that the project is all set to be executed within three months at all costs. The pipeline project is only awaiting the finalization of unanimous price mechanism system among the three stakeholders following the fixation of all operational and technical matters, he told PAGE in an exclusive interview in Lahore.

He said that the implementation of the said gas pipeline project was on top priority, adding, those who were talking about abandoning the project were mischief-mongers. "We are not getting influenced by any power," he said and hoped that if there were some political obstacles in the materialization of the project, they would be ironed out amicably. He said that as soon as all the stakeholders would agree to decide a price mechanism, the Pakistan government might hold dialogue with international donors to seek financial assistance.

It is learnt by reliable sources that the price suggested by the experts was 4.5 to 5.5 dollar per square feet while Iran had offered 8 dollar per square feet. Pakistan, however, was not agreeing on this price. Sources said that Iran is ready to fix gas price at 6 dollar per square feet only for Pakistan and it could be different for India. The SNGL managing director said that around 1100 km gas pipeline would be laid in Iran and 750 km pipeline in Pakistan area.

He, however, pointed out that if the said project had to be abandoned for any reason, Turkmanistan-Afghanistan-Pakistan and Qatar-Pakistan-India gas pipeline projects would be initiated.

When asked about the price of gas which was earlier announced to be raised, he said that price of gas will not be increased for six months throughout the country provided the crude oil prices did not undergo any surge.

Talking about the new projects, he said that SNGPL had planned to undertake the project of gas supply to various southern districts of NWFP with an estimated cost of Rs. 2.1 billion viz Hangu, Karak, Lakki, Bannu, Dera Ismail Khan, Tank and southern district of Punjab with an estimated cost of Rs. 3.7 billion vis Hasilpur, Chishtian Mandi, Bahawalnagar, Burewala, Pakpattan, Horoonabad, Daniapur, Karoropakka, Vehari, Tiba Sultan, Khaipur Tannawali, Yasman, Mainchainabad and Fort Abbas through construction of transmission lines of 315 km and 115 km, respectively.

Answering a question, he said that the share of natural gas in Pakistan's energy supply mix had increased from 41 percent to 51 percent whereas that of oil was decreased from 43 percent to 20 percent during the last three years. The company had its gas distribution network in 831 different towns and villages of Punjab and NWFP, he added. On another query, the SNGPL chief executive said that the company sold 6.40% more gas than last year while it managed with its own funds with no borrowings from any financial institution during the year.

He said that the company had contributed an amount of Rs. 16.606 million towards national exchequer. "The profit after tax was Rs. 3.722 million during the year. The company maintained all the financial ratios as prescribed by the World Bank loan covenants, standard corporate practices and the State Bank of Pakistan," he pointed out.

He said that the company provided 205.586 domestic connections, 4,013 commercial connections and 531 industrial connections during the year. He further stated that the industrial connections were also provided to the CNG stations.

The transmission system of the company had been extended to 6.195 km whereas distribution system extended to 46,964km, he said. He praised the services department which kept the flag of the company flying high with regard to telecommunication, engineering services, human resource development, consumer services, health, safety and environment issues.

Talking about the landmark project of gas supply to Murree Hills, he said it was a daunting task which was undertaken by the company and successfully commissioned during the financial year. "It is for the fist time in the history of pipeline construction in Pakistan that a gas line has been constructed at such a high elevation. The serpentine pipeline route, the rocky and hilly terrain, the movement of heavy construction equipment like dozers, cranes, trucks, moblilization of men and equipment against the steep elevation of more than 6,000 feet above the sea level was a demanding task, he concluded.