Two RLNG pipelines from south to north will be built: ISGS MD

ISLAMABAD: In a new development, the government has decided to build with GIDC (Gas Infrastructure Development Cess) funds two RLNG pipelines, each with capacity to transfer 1.6 bcfd (billion cubic feet gas per day), with diameter of 56 inches. The country is going to have more LNG terminals on private-to-private business model in the next three years time, with total capacity to re-gasify three billion cubic feet gas per day. The government will not extend any sovereign guarantee for offtake of gas from the upcoming LNG terminals.

So much so, the government has also made up its mind to acquire the land for the two gas pipelines, each with 1,100 kilometers length to be laid down from south to north. The second gas pipeline will be built, may be in venture with Russia or China or the country’s gas companies may build on their own, Ms Saira Najeeb, Managing Director of Inter-State Gas System (ISGS), divulged to The News in an interaction here on Tuesday.

Apart from it, she said, the government will also provide financing from GIDC Fund for the project to build gas storages in the upstream country and to this effect, the Asian Development (ADB) has been engaged for the feasibility report about the gas storages project.

She said that international and local companies that include Energas Terminals Pvt. Ltd, Engro Elengy Terminal Ltd, ExxonMobile Pakistan Pvt. Ltd, Mitsubishi Corporation, Pakistan Gas Port Consortium Limited, Tabeer Energy Private Limited have intimated the government in a meeting held on October 7, 2020 in the Petroleum Division that they will import and transfer 3 bcfd to the country once their LNG terminals come onstream. "This is the main reason for building the two RLNG pipelines."

The said LNG terminals will transport the gas to consumers through the said pipelines and the government will earn from the assets of pipelines through the transportation cost tariff. In addition, the government will also build gas storages in the country.

“We are currently internally discussing three scenarios on cost estimates, keeping in view the gas line of 1.2 bcfd with 42 inches diameter and pipeline of 1.6 bcfd with 48 inches or 56 inches diameters respectively. Nothing has been finalized so far but the gas pipeline with 56 inches diameter having capacity of 1.6 bcfd is more economical for the country. The cost of the NSGPP will be determined once the Russian side is taken on board. Keeping in view the undertaking of the said six companies, which are set to install LNG terminals on private-to-private business model that they will re-gasify LNG of 3 bcfd and inject into the country’s system on long term basis, the two RLNG gas pipelines are required."

Coming to the North-South Gas Pipeline Project (NSGPP) that got delayed by five years, she said that the current set-up in the Petroleum Division is quite serious towards the project and the government is at present hectically engaged with the Russian government under GtoG arrangement and after the SC judgment on GIDC, it wants to keep its equity at 51 percent and the Russian side has been offered equity of 49 percent.

“We are in touch with the Russian government and asked it to notify their technical team and more importantly we have invited them to come to Pakistan and sign the commercial agreement apart from giving their input for amending the IGA (Inter-government Agreement) accordingly.”

Earlier, Russia was to build the project with its financing but after the SC judgment on GIDC, the scenario has changed. “Now we have to advance on the NSGPP with GIDC amount available with the Finance Division and to this effect, the government has decided to make NSGPP Assignment Account in which the Finance Division will deposit the amount of GIDC on yearly basis as per the demand of Petroleum Division, which will be submitted to the Finance Division with the pace on work on NSGPP project."