ISLAMABAD: In a new development China, which had earlier backtracked from being the financial advisor for laying the 785 km pipeline in Pakistan’s territory under the Iran-Pakistan (IP) gas project, has once again shown willingness to become the EPCC (Engineering Procurement Construction and Commissioning) contactor.
President Asif Ali Zardari and federal minister for petroleum and natural resources Dr Asim Hussain who are currently in Beijing have reportedly succeeded in persuading China to take part in the IP project, a senior official quoting the information trickling down from China told The News.
“Managing director of Inter-State Gas System Mr Mubin Saulat dashed to China for finalising the details and Pakistan has agreed 90 percent of the terms and conditions offered by China for playing the role as contractor of the project.”
Pakistan had earlier issued tenders on April 27 to build the 785 kilometers long pipeline in two years’ time. The interested companies were bound to submit their technical and financial bids for the project by June 8. Now under the new scenario, the date of submitting the technical and financial bid has been extended to June 22 to acccommodate the Chinese company.
About 750 million to 1 billion cubic feet of gas per day will be transported at high pressure through 42-inch diameter pipeline. The contractor will also install three pressure compressors in the pipeline from Pak-Iran border to Nawabshah.
The official said the strategy, which was earlier worked out between Pakistan and Iran, has been slightly changed. Now the Chinese company will complete the project, but Iran will provide the pipeline, gas compressors and block valves. Earlier it was decided that the Iranian company would construct the project in Pakistan’s territory.
When asked why the Iranian company has not been allowed to complete the project, the official said it would have resulted in more US pressure and Pakistan would have become a victim of international economic sanctions imposed on Iran, so it was decided to approach China again.
To a question he said that Pakistan would provide reasonable funds for the project and in case of any shortage the Iranian offer of $250-500 million is available. He said the increase of GDS (Gas Development Surcharge) on gas to five sectors would help collect Rs102 billion in one year that would be utilised for laying down the pipeline.
Under the gas sales purchase agreement (GSPA), the official said, Pakistan is bound to have a first take of Iranian gas by December 2014 and in case of failure, it will have to pay $ 1 million per day to Iran as penalty.
Beijing finally agrees to lay IP gas line in Pak territory - thenews.com.pk