Tag Archives: pipeline

NT push for gas pipeline link with Queensland

Updated February 22, 2013 11:08:46

Northern Territory Chief Minister Terry Mills says he will lobby the Federal Government and Opposition to guarantee support for the construction of a gas pipeline between the Territory and Queensland.

Mr Mills told the Legislative Assembly the pipeline should be built from Tennant Creek in the Territory to Mount Isa in north-west Queensland to encourage growth and investment.

He says the project is now on the COAG agenda, which is proof of its national significance.

“This is a big, bold plan, a very important plan,” he said.

“It is part of the Country Liberals’ DNA as to have these sorts of plans that are going to create a better future for the Northern Territory.”

The proposed pipeline would cost an estimated $500 million.

Topics: government-and-politics, oil-and-gas, tennant-creek-0860, nt, darwin-0800, mount-isa-4825

First posted February 22, 2013 11:04:23

Oil pipeline ‘safe to resume flow’

 Taqa Bratani’s Cormorant Alpha platform is nearly 100 miles off Shetland A North Sea oil pipeline which was shut down because of a leak at an offshore platform has been declared safe to resume transporting supplies.


Taqa, operators of the Cormorant Alpha platform where the oil leak was discovered on Monday, had closed the Brent pipeline as a precaution.


The firm said the process of restoring the flow of 80,000 barrels of oil per day was under way.


Work is also taking place to stop the leak inside one of the platform’s legs.


Taqa removed non-essential workers from the Cormorant Alpha, about 94 miles from Lerwick in Shetland, as a precaution and said the leak had been contained.

Pumping station

Shutting down the platform affected the whole Brent pipeline system as the platform is a crucial pumping station.

Continue reading the main story
The process of restarting Brent throughput follows a thorough technical evaluation that shows it is safe to do so”

End Quote Taqa spokesperson It is understood the Brent pipeline system could no longer operate and eight other platforms servicing up to 27 oil fields were shut down.


These were the Dunlin, Thistle, Northern Producer, Murchison, North Alwyn, Tern, Eider and North Cormorant platforms.


Oil and Gas UK – the offshore industry body – said oil transported through the Brent pipeline system represented 10% of the UK’s North Sea oil production.


A Taqa spokesperson said: “Investigations have found there is no connection between the Brent pipeline system and the pipeline involved in the release.


“The process of restarting Brent throughput follows a thorough technical evaluation that shows it is safe to do so without any increased risk to Cormorant Alpha.


“The hydrocarbons released are contained within the platform leg and none have been released into the environment.”


Enterprise Minister Fergus Ewing said: “The Scottish government, including Marine Scotland, are monitoring this situation closely.”

Iran to provide $500m loan to Pakistan for IP gas pipeline


ISLAMABAD: Iran plans to invest $500 million to extend financial and technical assistance for laying the Pakistan section of the proposed gas pipeline between the two countries, according to a statement on Tuesday.


Iranian President Mahmoud Ahmadinejad is scheduled to visit Pakistan to sign the inter-governmental cooperation agreement (IGCA), according to which the Iranian government will provide a loan of $250 million to Pakistan and another $250 million will be arranged through Iranian commercial banks for engineering, procurement, and construction work on the Iran-Pakistan (IP) gas pipeline, IRNA news Agency reported.


According to a plan that has been proposed, Pakistani and Iranian companies would form a joint venture to lay the pipeline, it said.


Earlier, China and Russia had committed to financing the pipeline if they were awarded construction contracts without bidding.

Pak invite Iran to invest in gas pipeline

ISLAMABAD: Pakistan has offered Iran to invest in the construction of the gas pipeline. The government is expected to issue tenders for laying the gas pipeline in the coming week.

Iranian Ambassador Ali Raza met petroleum advisor Asim Hussain in Islamabad.

According to sources from the petroleum ministry the petroleum advisor asked the Iranian ambassador for Iran to participate in the construction of the gas pipeline in Pakistan.

According to officials of the Inter-state Gas System Company present in the meeting, Iran has been asked to help in the construction of the pipeline from the Iranian border. It is expected that the construction of this pipeline will start by December.

To import 750 million cubic feet gas daily from Iran, Pakistan need to lay a 780 km pipeline, expected cost of which is 1.5 billion dollars where as the supply from this pipeline is expected to commence from December 2014.

Standing firm: Pakistan to push ahead with IP gas pipeline project

Award of constr­uction contra­cts for the pipeli­ne to begin soon, says ISGS MD. Pakistan will import 1.3 bcfd of gas under this project, and the Asian Development Bank (ADB) is playing the role of transaction adviser for arranging financing. PHOTO: FILE

ISLAMABAD: 

The government on Monday reiterated its resolve to push ahead with the $1.5 billion Iran-Pakistan (IP) gas pipeline project, recalling that its internationally outcast neighbour was the first Muslim country to recognise Pakistan after its creation.

Addressing a seminar on ‘Pakistan’s Potential in Oil and Gas Sector’, organised by the Petroleum Institute of Pakistan (PIP), Inter-State Gas Systems (ISGS) Managing Director Mubeen Sulat said that Pakistan and Iran had made a “lot of progress” on the project.

“Iran has completed almost 90% work on the gas pipeline and we have completed a detailed engineering survey and a bankable feasibility study for the gas import project, which has entered the implementation stage,” he said.

Pakistan will import 750 million cubic feet of gas per day (mmcfd) under the IP pipeline project, with the first flow scheduled for December 2014. “We are now approaching the phase of awarding construction contracts for the pipeline,” he added. He claimed that Pakistan had also “made a lot of progress” on the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project.

Pakistan will import 1.3 billion cubic feet of gas per day (bcfd) under this project and the Asian Development Bank (ADB) has been playing the role of transaction adviser for arranging financing. “We have received good response to requests for financing the TAPI gas pipeline project from leading investors, during road shows in different countries,” Sulat added.

In his inaugural address, Adviser to the Prime Minister on Petroleum and Natural Resources Dr Asim Hussain stressed upon exploration and production companies operating in Pakistan to support the Petroleum Institute of Pakistan (PIP) and to help develop it into a think tank for policy initiatives for the oil and gas sector.

Hussain said that Pakistan offers great potential in the oil and gas sector and assured full cooperation and facilitation to all investors who wished to invest in the country.

He further said that the government is also working on tight gas, low BTU gas, shale gas, marginal gases, flared gas and stranded gas policies, in order to tap available resources for the benefit of the country.

Outlining the achievements of the government, Hussain informed the gathering that 1.6 million consumers had been given gas connections at a cost of Rs10.41 billion, while 879 kilometres of transmission lines and 39,707 km of distribution and service lines were added to the existing network with an investment of Rs61.164 billion during the last four and a half years.

“As a result of current efforts, 750 mmcfd of gas is likely to be added to the system by June 2013 – an increase of 20%,” he added.

He said that the government had prepared the National Mineral Policy 2012 to meet the challenges of large-scale mining and to enhance international competitiveness.

It was stated that the country imported oil to the tune of $15 billion, which constituted 36% of the overall import bill of the country. The value of gas produced annually in the country is $4.3 billion and oil produced in the country is $2.4 billion, he added.

Oil and Gas Development Company Limited MD Masood Siddiqui said that incentives announced in the new petroleum policy had had a direct impact on exploration activities. “We have revised our drilling target for June 30, 2013 from 28 to 35 wells,” he said, adding that oil and gas production would also increase due to enhanced exploration activities.

The director general petroleum concessions said that the government had decided to auction 60 blocks after the announcement of the new petroleum policy. “We will conduct road shows in November in different countries to attract oil and gas exploration companies to participate in the bidding process.”

Published in The Express Tribune, October 9th, 2012.

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Standing firm: Pakistan to push ahead with IP gas pipeline project

Award of constr­uction contra­cts for the pipeli­ne to begin soon, says ISGS MD. Pakistan will import 1.3 bcfd of gas under this project, and the Asian Development Bank (ADB) is playing the role of transaction adviser for arranging financing. PHOTO: FILE

ISLAMABAD: 

The government on Monday reiterated its resolve to push ahead with the $1.5 billion Iran-Pakistan (IP) gas pipeline project, recalling that its internationally outcast neighbour was the first Muslim country to recognise Pakistan after its creation.

Addressing a seminar on ‘Pakistan’s Potential in Oil and Gas Sector’, organised by the Petroleum Institute of Pakistan (PIP), Inter-State Gas Systems (ISGS) Managing Director Mubeen Sulat said that Pakistan and Iran had made a “lot of progress” on the project.

“Iran has completed almost 90% work on the gas pipeline and we have completed a detailed engineering survey and a bankable feasibility study for the gas import project, which has entered the implementation stage,” he said.

Pakistan will import 750 million cubic feet of gas per day (mmcfd) under the IP pipeline project, with the first flow scheduled for December 2014. “We are now approaching the phase of awarding construction contracts for the pipeline,” he added. He claimed that Pakistan had also “made a lot of progress” on the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project.

Pakistan will import 1.3 billion cubic feet of gas per day (bcfd) under this project and the Asian Development Bank (ADB) has been playing the role of transaction adviser for arranging financing. “We have received good response to requests for financing the TAPI gas pipeline project from leading investors, during road shows in different countries,” Sulat added.

In his inaugural address, Adviser to the Prime Minister on Petroleum and Natural Resources Dr Asim Hussain stressed upon exploration and production companies operating in Pakistan to support the Petroleum Institute of Pakistan (PIP) and to help develop it into a think tank for policy initiatives for the oil and gas sector.

Hussain said that Pakistan offers great potential in the oil and gas sector and assured full cooperation and facilitation to all investors who wished to invest in the country.

He further said that the government is also working on tight gas, low BTU gas, shale gas, marginal gases, flared gas and stranded gas policies, in order to tap available resources for the benefit of the country.

Outlining the achievements of the government, Hussain informed the gathering that 1.6 million consumers had been given gas connections at a cost of Rs10.41 billion, while 879 kilometres of transmission lines and 39,707 km of distribution and service lines were added to the existing network with an investment of Rs61.164 billion during the last four and a half years.

“As a result of current efforts, 750 mmcfd of gas is likely to be added to the system by June 2013 – an increase of 20%,” he added.

He said that the government had prepared the National Mineral Policy 2012 to meet the challenges of large-scale mining and to enhance international competitiveness.

It was stated that the country imported oil to the tune of $15 billion, which constituted 36% of the overall import bill of the country. The value of gas produced annually in the country is $4.3 billion and oil produced in the country is $2.4 billion, he added.

Oil and Gas Development Company Limited MD Masood Siddiqui said that incentives announced in the new petroleum policy had had a direct impact on exploration activities. “We have revised our drilling target for June 30, 2013 from 28 to 35 wells,” he said, adding that oil and gas production would also increase due to enhanced exploration activities.

The director general petroleum concessions said that the government had decided to auction 60 blocks after the announcement of the new petroleum policy. “We will conduct road shows in November in different countries to attract oil and gas exploration companies to participate in the bidding process.”

Published in The Express Tribune, October 9th, 2012.

Dilly-dallying: IP pipeline – no concrete offer to Russia yet

Islama­bad, Moscow unlike­ly to seal deal during Putin’s visit. Pakistan is desperately seeking funds for the pipeline and is in a critical situation since China has also backed out due to the US opposition. DESIGN: ESSA MALIK

ISLAMABAD: 

Pakistan and Russia are unlikely to seal a deal on the construction of Iran-Pakistan (IP) gas pipeline during Russian President Vladimir Putin’s visit to Islamabad next month as the former is shy of making a ‘concrete offer’ of cooperation because of intense pressure from the United States.

Sources in the Ministry of Petroleum and Natural Resources told The Express Tribune Russian authorities were expecting some concrete offer from Pakistan for financing the construction of the pipeline during a meeting of the Inter-governmental Commission (IGC) held recently in Islamabad.

“During the dialogue, Russia wanted to know its position in the IP project with some clear offer from Pakistan – whether it will only finance the project or also construct the pipeline and provide machinery,” an official said, adding Pakistan did not give a clear response to these questions.

Now Russian authorities were perplexed and wondered how the two sides could make a breakthrough in such a confusing situation, he said.

The IGC meeting was a preparatory exercise prior to the visit of the Russian president in October to prepare the ground for striking deals on different projects like IP gas pipeline, Diamer Bhasha Dam and 1,000-megawatt CASA power import project. Russia has placed the IP pipeline on top of its priorities despite US pressure, which fiercely opposes trade and economic ties with Tehran over its alleged nuclear programme.

Under the IP project, costing a total of $1.5 billion, Pakistan will import 750 million cubic feet of gas per day (mmcfd) from Iran, which could be increased to one billion cubic feet per day (bcfd).

“We see Putin’s visit as a goodwill gesture only to bolster relations and no milestone will be reached due to the US pressure,” a petroleum ministry official remarked.

He said Moscow had expressed its desire to become a partner of Pakistan in overcoming the energy crisis and its energy giant Gazprom was ready to take part in the IP pipeline project.

Pakistan is desperately seeking funds for the pipeline and is in a critical situation since its long-trusted friend China has also backed out due to the US opposition.

“The Pakistan government should make a concrete offer and welcome the Russians at a time when no other country is coming forward to finance the project,” the official suggested.

Russia has also expressed interest in building another pipeline, which will run from Turkmenistan, pass through Afghanistan and Pakistan and end in India, which is referred to as the TAPI project. For this project, Pakistan and India have signed a gas purchase agreement with Turkmenistan.

This pipeline enjoys the backing of the US and Asian Development Bank (ADB), which is acting as transaction adviser to generate funds for the $7.5 billion project.

Recently, Pakistan organised a road show in Singapore to woo investors, and according to an official of the petroleum ministry, around six renowned companies have expressed interest in participating in the TAPI project.

Published in The Express Tribune, September 18th, 2012.

IPI pipeline: Iran may ask India to push ahead

Presid­ents to meet today; projec­t will likely be discus­sed.  India has cited security concerns, as the proposed pipeline passes through volatile regions of Pakistan’s Balochistan province. ILLUSTRATION: JAMAL KHURSHID


Iranian President Mahmoud Ahmadinjead is likely to ask Indian Prime Minister Manmohan Singh to fast track the Iran-Pakistan-India pipeline project when the two meet in Tehran on Wednesday, Indian news agency IANS has reported.


The meeting is expected to revive stalled negotiations over the ambitious $7 billion pipeline proposal that seeks to bring Iranian gas to India via Pakistan, reported IANS.


Iran and Pakistan have already sealed a bilateral deal on the pipeline, but India has yet to take a decision due to various reasons. India has cited security concerns, as the proposed pipeline passes through volatile regions of Pakistan’s Balochistan province, IANS said. Transport and transit fees are also contentious issues.


Apart from scepticism about the economic and logistical viability of the pipeline, the project is also opposed by the US, which feels its implementation will amount to a defeat of the superpower’s larger strategy of isolating Tehran in the region. In India, the pipeline has been virtually written off, but there are signs that it may yet be revived.


Early this month, an Indian parliamentary panel asked the petroleum ministry to “vigorously” pursue and settle all pending issues related to the project, as it would help address the country’s growing energy demand.


Published in The Express Tribune, August 29th, 2012.

Pakistan, India to discuss construction of LNG pipeline

Delhi plans to extend its gas pipeli­ne to Wagah border.  India had already laid a pipeline network covering 100kms for transporting LNG to Bhatinda, from where the pipeline could be extended to Pakistan. PHOTO: FILE


Islamabad and Delhi are expected to discuss a plan to lay a pipeline from India to Pakistan for export of liquefied natural gas (LNG) in a meeting to be held in Islamabad in the first week of September.


According to sources, Pakistan and India, during the deliberations, will also touch issues of LNG pricing and transport facility. They said India was planning to expand its pipeline network for shipment of LNG across the border.


The sources pointed out that India had already laid a pipeline network covering 100kms for transporting LNG to Bhatinda, from where the pipeline could be extended to Pakistan’s Wagah border to inject gas into the network of Sui Northern Gas Pipelines Limited (SNGPL).


Indian LNG trading company, Petronet Private Limited (PPL), has an LNG receiving and re-gasification terminal at Dahej, Gujarat with original handling capacity of five million tons per annum (mtpa). The capacity of the terminal, which is meeting around 20% of the country’s gas demand, was expanded to 10mtpa in June 2009.


The LNG price for the Dahej project is linked with Japan’s crude cocktail price. India may also link the price of gas for Pakistan with Japan’s price.


PPL has a long-term contract with RasGas, Qatar for supply of 7.5mtpa of LNG with back-to-back sales arrangement with GAIL India, Indian Oil Corporation and Bharat Petroleum. It has also made arrangements with Exxon Mobil’s Gorgon venture in Australia for supply of 1.44mtpa.


India also has an oil refinery in Bhatinda from where it desires to export oil to Pakistan as well. In this regard, Delhi has expressed interest in building a pipeline to Wagah for supply of oil to Pakistan.


An energy expert said Pakistan would have to use the option of pipeline if it wanted to import LNG from India. However, he suggested that Pakistan should first try to find out whether India was in a position to export gas in the face of shortages there.


“India currently faces shortage of over four billion cubic feet of gas per day (bcfd), which poses a question mark over whether it will be able to provide gas to Pakistan,” he said, adding there were some other questions which needed to be answered before going for LNG imports from India.


“The proposed import of 200 million cubic feet per day (mmcfd) of LNG may be a short-term arrangement,” he said, adding the quality of pipeline would need to be examined to find out how long it would be able to channel the gas if a long-term contract was reached between the two countries.


He pointed out that India was importing 75% of LNG in a long-term arrangement with Qatar and 30% of the requirement was being met through spot purchases.


“Pakistan may cost $3 to $4 per million British thermal units (mmbtu) in terms of terminal toll, profit and transportation of LNG through the pipeline,” he said, adding, however, the cost of LNG ranged between $13 and $18 per mmbtu in India.


Discussing gas wastage in the country, the expert said “efficiency of gas appliances in Pakistan is 30% to 35%, prompting the need for the government to focus on using most efficient appliances,” he said.


Published in The Express Tribune, August 26th, 2012.

IP gas project: Who will finance Pakistan’s side of pipeline?

Pakist­an and Iran to meet next month to finali­se deal on laying Pakist­an’s portio­n.  The project is expected to facilitate the import of 700 million cubic feet of gas every day through the 2,100-kilometre pipeline. PHOTO: FILE

ISLAMABAD: 

As Russia and China have not given confirmed financing the IP gas pipeline project, Pakistan and Iran will resume talks in the first week of September to finalise the arrangement of finance to lay Pakistan’s side of the pipeline.


Russia and China are conducting due diligence of the project although there has been no response so far, said an official.


Pakistan will also urge the Iranian team to double its pledged amount to $500 million during the upcoming meeting of the working group on IP gas pipeline project. “Iran has already committed to raise $250 million financing for the gas pipeline project through its commercial banks,” sources said.


The project is expected to facilitate the import of 700 million cubic feet of gas every day through the 2,100 kilometre pipeline which will ease the current energy crisis in Pakistan.


Iran-Pakistan gas pipeline is expected to reach the zero border point in the first half of next Iranian calendar year beginning 20 March 2013. National Iranian Gas Company (NIGC) Managing Director, Javad Oji in a recent statement, said that work on the 56-inch Seventh Iran’s Gas Trunkline from Iranshahr, southeast of Iran to Pakistan border and Zahedan city is complete and it is expected to come on stream in September 2013.


Coordination committee to meet on Monday


In another group meeting, a special Iranian team will participate in the two-day coordination committee meeting on the IP gas pipeline project scheduled to meet in Islamabad on Monday to review progress of the project.


Pakistan and Iran had formed the joint working body to finalise a deal with the latter to lay Pakistan’s portion of the pipeline during a meeting held in Islamabad on July 17 and 18.


The Joint Working Group comprised experts from technical, legal, financial and commercial sectors to work out details with respect to implementation of the Iran-Pakistan gas pipeline project.


“This group will also examine the impact of US sanctions against Iran on IP gas pipeline project,” sources added. State-owned National Bank of Pakistan (NBP) and Oil and Gas Development Company Limited (OGDC) walked away from the project last year fearing US sanctions. In March this year, the world’s largest bank Industrial and Commercial Bank of China Limited (ICBC) after agreeing to finance Pakistan’s side of the pipeline also shied away.


“If the two countries reach an agreement, Iran would also provide material for the pipeline,” source added.


German based firm ILF has completed detailed engineering design of IP gas pipeline project and according to the interim feasibility report, the cost of the project is between $1.2 and $1.5 billion.


“If the project is materialised with the participation of local companies, the cost of the project fall while the cost would go up if foreign companies complete the project. Sources also hinted that local and Iranian companies could wrap up the project.


Published in The Express Tribune, August 25th, 2012.

Energy project: Turkmenistan seeks investors for TAPI gas pipeline

The energy-rich state plans to sell the projec­t to intern­ationa­l oil and gas majors in autumn.  Turkmenistan on Wednesday signed agreements with India and Pakistan to deliver gas through a new pipeline. DESIGN: FAIZAN DAWOOD

ASHGABAT: 

Turkmenistan said on Saturday that it would try to recruit international investors for a new gas pipeline project that would link Central and South Asia.


The energy-rich state plans to pitch the project to international oil and gas majors and financial institutions in the autumn, the Neitralny Turkmenistan newspaper reported.


The plan for a TAPI (Turkmenistan-Afghanistan-Pakistan-India) natural gas pipeline, which is backed by the Asian Development Bank, is regarded with suspicion by some analysts.


However the United States has praised the project for boosting regional peace and prosperity.


Deputy Prime Minister Yagshygeldi Kakayev announced plans on Friday for “a series of meetings with representatives of leading international oil and gas companies and financial institutions”, the news report said.


He said the meetings planned for September and October would discuss “questions concerning the financing of the TAPI project and the creation of a consortium”.


“A presentation of the TAPI project is planned to be held in Singapore, New York and London, which are major business and financial centres of southeastern Asia, America and Europe,” the newspaper said.


The report said that all the countries involved in the project, plus the Asian Development Bank, would take part in the presentations.


In May, Turkmenistan signed agreements with India and Pakistan to deliver gas through the new 1,700-kilometre pipeline, the first contracts in the ambitious project.


Turkmenistan has the world’s fourth-largest gas reserves and India and Pakistan are both eager to tap this source through the pipeline.


Much of the pipeline will go through Afghanistan which neighbours both Turkmenistan and Pakistan but remains wracked by violence and instability.


Published in The Express Tribune, July 29th, 2012.

Gas import: Iran to lay Pakistan’s portion of pipeline

Workin­g commit­tee formed to finali­se terms of agreem­ent. The 1,150 kilometre long pipeline is projected to cost $1.2 to $1.5 billion. PHOTO: FILE

ISLAMABAD: Avoiding pressure from the United States, Pakistan and Iran have committed to press ahead with the gas pipeline project and constituted a joint working committee to finalise a deal for laying Pakistan’s portion of the pipeline by Tehran.

Iran has also offered to set up an oil refinery in Pakistan. Earlier, it had discussed a plan to lay an oil pipeline to Gwadar where a refinery would be set up to process crude oil.

Until one and a half years ago, two Pakistani refineries had been importing Iranian crude oil on three-month credit, but supply stopped afterwards as banks showed reluctance to open letters of credit following imposition of US sanctions on Tehran.

According to sources, these developments came during two days of talks in Islamabad, which concluded on Wednesday.

Sources told The Express Tribune that Iranian authorities reiterated their resolve to provide technical and financial help for constructing the gas pipeline.

“A joint working group has been formed to consider different options for Iran to lay the pipeline,” a source said, adding Tehran had already committed to provide $250 million and was willing to arrange more financing through Chinese commercial banks.

“The working group will also discuss the option of financing offered by Iran,” the source said. German-based firm ILF has completed detailed engineering design of the pipeline and according to an interim feasibility report, the project will cost $1.2 billion to $1.5 billion.

“If local companies participate in the project, the cost will come down and if foreign firms undertake the venture the cost will go up. There is also an option under which local and Iranian companies will join hands to complete the project,” the source said.

“Though Iran is an option to strike deal on government-to-government basis, we are also discussing the construction of the pipeline with China and Russia,” he said.

Meanwhile, the Pakistan-Iran joint committee on oil, gas and energy held a meeting on July 17 and 18 in Islamabad to discuss bilateral cooperation in oil and gas sectors.

The Iranian team was headed by Dr Ahmad Khalidi, Deputy Minister of Internal Affairs, Ministry of Petroleum while Pakistani team was led by Abid Saeed, Additional Secretary Ministry of Petroleum and Natural Resources.

The Iranian side expressed its intention to invest in hydrocarbon exploration and production including upstream and midstream sectors. It also invited Pakistani companies to invest in oil and gas exploration and production in Iran.

Published in The Express Tribune, July 19th, 2012.

‘IP gas pipeline essential to end shortage’

SNGPL head update­s indust­rialis­ts on the projec­t. WALKED AWAY: 3 is the number of companies that have backed out from the pipeline due to fears of US sanctions. PHOTO: FILE

LAHORE: 

Industrialists are of the view that the US opposed Iran Pakistan gas pipeline project can heal the gas shortage to an extent. 

Depleting reserves and failure to exploit new fields is expected to widen the supply and demand gas, LCCI President Irfan Qaiser Sheikh told the Sui Northern Gas Pipelines Limited (SNGPL) Managing Director Arif Hameed in a meeting on Monday.

Gas shortfall is estimated to reach 2.5 billion cubic feet per day (BCFD) in 2014-15, 3 bcfd in 2015-16 and 3.5 bcfd in 2016-17.

Sheikh believes that the Pak-Iran gas pipeline can rescue the industry from the crisis. “Work on the 785km gas pipeline needs to be accelerated on an emergency basis,” Sheikh added. Initially, the pipeline will add around 750 million cubic feet per day (mmcfd) of gas, which will gradually be increased to over 1.5 billion cubic feet per day (bcfd).

On Pakistan-Iran gas pipeline project, SNGPL Managing Director Arif Hameed said that the government is working efficiently and tenders for the project have been issued.

After many hiccups, Pakistan finally awarded contracts without bidding for the multi-billion-dollar pipeline to Russia last month.

State-owned National Bank of Pakistan (NBP) and Oil and Gas Development Company Limited (OGDC) walked away from the project last year while the world’s largest bank Industrial and Commercial Bank of China Limited (ICBC) after agreeing to finance Pakistan’s side of the pipeline shied away after succumbing to US pressure in March.

Gas shortage to increase

SNGPL Managing Director Arif Hameed has given a heads up to the industry of a serious gas shortage and increase in gas consumption during the upcoming winter season.

In the new gas policy, he said, the gas tariff would be improved to facilitate gas exploration in the country.

Due to high gas tariff, gas theft has increase but a new technology has been installed that identifies pilferage and leakage, he maintained.

LCCI President Irfan Qaiser Sheikh said the shortage of natural gas has become the core issue for the industries and there is a need to find out new reserves as current gas reserves are depleting at a rapid pace.

He said that current line losses of over 10% need to
be minimised to decrease theft and increase revenue collection. 

Published in The Express Tribune, July 10th, 2012.

No trespassing: OGRA to cancel pipeline allocation of LNG importers

Seeks minist­ry’s green signal as import­ers could not meet commit­ments. Ogra had revealed its intention of cancelling the pipeline capacity allocated to the LNG importers including Global Energy of Turkey, Pakistan Gas Port and Engro Corporation. illustration: jamal khurshid

ISLAMABAD: 

The liquefied natural gas (LNG) import programme is facing major hiccups as the Oil and Gas Regulatory Authority (Ogra) has decided to cancel the pipeline capacity allocated to LNG importers after taking the petroleum ministry into confidence because of the failure of the importers to meet commitments within the set timeframe.

In October 2011, Ogra had allocated pipeline capacity to three LNG project developers, allowing them to use the pipeline network of state-run gas distribution companies for transporting 1.4 billion cubic feet per day (bcfd) of imported LNG to consumers.

A senior government official told The Express Tribune that Ogra, in a letter written to the petroleum ministry, had revealed its intention of cancelling the pipeline capacity allocated to the LNG importers including Global Energy of Turkey, Pakistan Gas Port and Engro Corporation.

The importers have failed to meet project requirements within the stipulated period of six months. “They have not even found global buyers as yet,” said the official.

According to him, the petroleum ministry had been involved in the whole process of allocating pipeline capacity to the LNG importers, prompting Ogra to take the ministry on board before going ahead with capacity cancellation.

Owing to the delay, an influential LNG lobby was trying to seek an extension in the deadline for financial close relating to the pipeline capacity, a petroleum ministry official said. Financial close is the completion of documentation process and preparation of a satisfactory business model.

According to an understanding reached with the government, the LNG importers were expected to enter into financial arrangements, agreements with LNG suppliers and gas buyers by the end of April, but they could not be able to achieve these.

In its recent decision on revenue requirements of gas utilities, Ogra also rejected the demand for billions of rupees made by Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines Limited (SNGPL) for laying LNG infrastructure due to slow progress to meet commitments made by the importers.

Earlier to press ahead with the project, the government had asked SSGC and SNGPL to invest $1.2 to $1.4 billion in laying new pipelines and create room for LNG suppliers. At present, SSGC has the capacity to transport 500 million cubic feet of LNG per day.

Global Energy had committed to bring first consignment of 500 mmcfd by the end of June, followed by Engro bringing the same quantity in December 2012 and Gas Port importing 400 mmcfd in the first quarter of 2013.

At the time of allocating pipeline capacity, Ogra had warned LNG importers of capacity cancellation and seizure of bank guarantee if they failed to bring gas within the set timeframe.

The ministry had proposed bank guarantee of $35 million to be furnished by LNG importers, but at the time of allocating pipeline capacity, the amount was set at $10 million. Later, it was further reduced to $5 million, the ministry official said.

However, the LNG importers, who had to furnish bank guarantee within 90 days of capacity allocation, defaulted on this commitment as well and no company deposited even the reduced amount of $5 million, the official added.

Published in The Express Tribune, June 22nd, 2012.

TAPI pipeline: Indian and Pakistani firms sign gas purchase contract

1,800km long pipeli­ne can supply 90 mcmd of natura­l gas. India and Pakistan are hungry for gas supplies and Turkmenistan is keen to free itself from reliance on gas exports to Russia. PHOTO: FILE

ISLAMABAD: 

State-owned energy companies from Pakistan and India have signed a ‘Gas Sales and Purchase Agreement’ with Turkmenistan’s national oil company Turkmengaz that will lead to the supply of up to 90 million cubic metres of natural gas a day (mcmd) via the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline.

Turkmen officials have said the proposed pipeline could carry one trillion cubic metres of gas over a 30 year period, or 33 billion cubic metres a year. “After more than 20 years of diplomacy, the 1,800 kilometre natural gas pipeline that connects one of Central Asia’s largest energy suppliers with South Asia’s critically underserved market has moved a step forward,” said a press statement of Asian Development Bank (ADB) released on Wednesday.

India’s GAIL Limited and Pakistan’s Inter-State Gas System Private Limited were the parties involved in the agreement with Turkmenistan. Moreover, Afghanistan has also signed a memorandum of understanding on long term gas cooperation with Turkmenistan, the statement added. India and Pakistan are both hungry for gas supplies and Turkmenistan, formerly part of the Soviet Union, is keen to free itself from reliance on gas exports to Russia. The bulk of exported gas will help meet surging energy demand in the South Asian region, where energy needs are set to double by 2030, while the remainder will alleviate chronic power shortages in Afghanistan. The Indian government said in a statement on May 17 that the pipeline will turn operational in 2018. India and Pakistan will each get 38 mcmd of gas, while the remaining 14 mcmd will be supplied to Afghanistan, it said.

“This is a historic moment of unparalleled regional cooperation,” said ADB’s Central and West Asia Department Director General Klaus Gerhaeusser. ADB has played a leading role in coordinating and facilitating the TAPI negotiation process over the past 10 years. “The pipeline represents a win-win scenario for each member country, as it will give Turkmenistan more diverse markets and help fuel the energy hungry economies to the South,” Gerhaeusser said. He added that each country stands to gain, terming it not only as the `Peace Pipeline,’ but a gas supply channel to prosperity. With the TAPI channel in place, Turkmenistan’s gas will cater a greater range of overland markets, diversifying from its existing markets in Russia, Iran, and China. However, an analyst at IHS Global Insight Lilit Gevorgyan said that while the pipeline could be a lucrative commercial project, it would run through more than one high security risk country, “which puts the actual construction under a big question mark”.

The sale-purchase agreement between Afghanistan and Turkmenistan is expected to be finalised soon. The next step for the four TAPI nations is to attract commercial partners to build, finance, and operate the pipeline, estimated in 2008 to cost at least $7.6 billion. Analysts and officials now believe the construction could cost between $10 billion and $12 billion.

Separately, an Indian Oil Ministry official said last week that the transit fee for the gas had been fixed at about 50 cents per million British thermal units. India imports 80% of its oil demand while falling output has forced it to buy costly liquefied natural gas.

Published in The Express Tribune, May 24th, 2012.

TAPI pipeline: Turkmenistan signs first contracts with India, Pakistan

1,700km TAPI pipeli­ne aims to transp­ort more than 30 billio­n cubic metres of gas annual­ly from Turkme­nistan. 1,700km TAPI pipeline aims to transport more than 30 billion cubic metres of gas annually from Turkmenistan. PHOTO: FILE

AVAZA: Turkmenistan on Wednesday signed agreements with India and Pakistan to deliver gas through a new pipeline that will transit Afghanistan, the first contracts in the ambitious project.

The 1,700-kilometre (1,050-mile) TAPI pipeline aims to transport more than 30 billion cubic metres of gas annually from Turkmenistan to energy-hungry consumers in Pakistan and India as well as relieving shortages in Afghanistan.

The sale-purchase agreements for the yet-to-be-built pipeline were signed at a ceremony on the sidelines of the annual Turkmenistan oil and gas congress in its Caspian Sea resort of Avaza, just outside the city of Turkmenbashi.

They were inked by the head of the state gas company Turkmengaz Sakhatmurad Mamedov with representatives of India’s Gail Ltd and Pakistan’s Inter State Gas System.

“Today we are witnesses of a historic event, not just of regional but of world scale,” said Turkmenistan Deputy Prime Minister Baimurat Khodzhamukhamedov.

Turkmenistan and Afghanistan signed a memorandum of understanding for cooperation in the gas sector but no contract. Khodzhamukhamedov said negotiations were continuing with Afghanistan on the price of deliveries.

The TAPI (Turkmenistan-Afghanistan-Pakistan-India) natural gas pipeline, which is backed by the Asian Development Bank (ADB), is regarded with suspicion as a wildy ambitious pipedream by some analysts.

Much of the pipeline will go through Afghanistan which neighbours both Turkmenistan and Pakistan but remains wracked by violence and instability.

The pipeline’s route would take it straight through the region’s most turbulent locales, including conflict-torn Helmand and Kandahar provinces in Afghanistan as well as Quetta in Pakistan, where tribal unrest is common.

But India’s Oil Minister S. Jaipal Reddy said that his fast-growing nation was waiting impatiently for the pipeline to be ready, noting that India’s energy demands would quadruple by 2017.

Afghanistan’s Mining Minister Wahidullah Shahrani said that the project will “spread peace and help our region flourish.”

Financial details and precise volume details of the contracts were not disclosed but according to the ADB, the contracts will lead to the supply of up to 90 million cubic meters of natural gas a day through the pipeline.

Turkmenistan is also being courted by the West and China for its immense gas reserves which, according to British auditors Gaffney, Cline and Associates, are the second largest in the world.

The country is also keen on diversifying its export routes which remain dependent on its former Soviet master Russia with whom it has had occasionally prickly relations.

It has already begun exporting gas to China through a pipeline that was opened by China’s President Hu Jintao in December 2009.

According to the ADB, the TAPI in 2008 was estimated to cost at least $7.6 billion and the partners now face the task of attracting commercial partners to build, finance, and operate the pipeline.

But the project does enjoy the support of the United States, which is keen to deter subcontinent states from dependency on energy supplies from its arch foe Iran.

Crucially, the pipeline project also signals a further warming of economic ties between the traditional rivals India and Pakistan.

“Each country stands to gain, making this not only the ‘Peace Pipeline,’ but a pipeline to prosperity as well,” said Klaus Gerhaeusser, director general of the central and west Asia department at the ADB.

Turkmens close to gas deal on trans-Afghan pipeline

Turkme­nistan plans to sign the sales and purcha­se agreem­ent for the TAPI pipeli­ne. Turkmenistan plans to sign the sales and purchase agreement for the TAPI pipeline. DESIGN: FAIZAN DAWOOD

ASHGABAT: Turkmenistan plans this week to sign a long-awaited agreement to supply natural gas to Pakistan and India through an ambitious US-backed pipeline that would cross Afghanistan, a source in the Central Asian country’s government told Reuters on Monday.     

Turkmenistan, which holds more than 4% of the world’s natural gas reserves, plans to sign the sales and purchase agreement for the TAPI pipeline on Wednesday, during an international gas conference in the Caspian Sea resort of Avaza.

“The plan is to sign the TAPI natural gas sales and purchase agreement with Islamabad and Delhi on May 23 in Avaza, by the Caspian, where the gas congress is opening,” the government source said, on condition of anonymity.

He gave no details of the content of the agreement.

The idea of the TAPI pipeline, an acronym formed from the initials of the four countries through which it would pass, was first raised in the mid-1990s but construction has yet to begin.

In a sign a deal might be imminent, India’s cabinet last week allowed state-run gas-firm GAIL (India) Ltd to sign a gas purchase agreement with Turkmenistan.

Turkmen officials have said the proposed 1,735-km (1,085-mile) pipeline could carry 1 trillion cubic metres of gas over a 30-year period, or 33 billion cubic metres a year.

But the route, particularly the 735-km (450-mile) leg through the Afghan provinces of Herat and Kandahar, presents significant security challenges and will require billions of dollars in funding.

A US official estimated in March that the pipeline could cost between $10 billion and $12 billion to construct.

Daniel Stein, senior adviser to the US State Department’s special envoy for Eurasian energy, also said that two major US oil companies were interesting in participating in the project. He declined to name the companies.

Ex-Soviet Turkmenistan is promoting the TAPI pipeline as a key element in plans to cut reliance on supplies to Russia and to boost annual gas exports to 180 billion cubic metres by 2030.

BP data show Turkmenistan’s natural gas reserves equal to those of Saudi Arabia and behind only Russia, Iran and Qatar.

The country aims to supply gas from its Galkynysh field, better known by its previous name, South Iolotan. Auditor Gaffney, Cline & Associates has ranked the field the world’s second largest, with gas reserves of between 13.1 trillion and 21.2 trillion cubic metres.

Volumes and fees

Turkmenistan’s unflinching policy of selling gas at its own borders means Pakistan and India would need to settle volumes, price and transit fees with each other and with Afghanistan.

The Indian government said in a statement on May 17 that the pipeline would be operational in 2018. India and Pakistan would each get 38 million cubic metres per day (mcmd) of gas, while the remaining 14 mcmd would be supplied to Afghanistan, it said.

Indian Petroleum Minister S. Jaipal Reddy is scheduled to lead his country’s delegation to Turkmenistan to sign the agreement. India has nominated GAIL for the purchase of gas.

Separately, an Indian Oil Ministry official said last week that the transit fee for the gas had been fixed at about 50 cents per million British thermal units (mmBtu).

India, Asia’s third largest oil consumer, imports about 80 percent of its oil needs while falling local gas output has forced it to buy costly liquefied natural gas.

“We expect that India will more than double gas consumption over the next 25 years,” Ulrich Benterbusch, director of the Global Energy Dialogue at the International Energy Agency, told an  international energy conference in Uzbekistan last week.

“Domestic gas production in India will not be able to keep up,” he said.