Pak needs $1-bn to build underground storage

Islamabad: Pakistan will require one billion dollars to build underground storage to store gas to be imported from Iran and Turkmenistan.

Sources in Petroleum Ministry revealed that Asian Development Bank (ADB), in a joint study with Sui Northern Gas Pipeline Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL), had disclosed that the proposed underground storage would cost one billion dollars to store gas imported from Iran and Turkmenistan.

The ADB has also noted that Sindh is the most suitable province as far as geographic, political and law and order situation is concerned. However, the work on the underground gas storages, sources added, would be initiated after gas import deals with Iran and Turkmenistan matured.

According to the sources, the government has already reconstituted a sub-committee of the Economic Co-ordination Committee (ECC) of the Cabinet that has a mandate to oversee Iran-Pakistan-India (IPI) gas pipeline and Turkmenistan-Afghanistan-Pakistan-India (TAPI).The committee will also monitor the underground gas storages project.

Sources said that SNGPL, SSGCL and ISGCL would be involved in building three to four underground gas storages to store imported gas from Iran and Turkmenistan. Pakistan will import 2.2 billion cubic feet gas from Iran, out of which Pakistani share stands at 1.05 billion cubic feet. If India does not join the project, Pakistan would consume the entire amount, i.e. 2.2 billion cubic feet.

Pakistan will import 3.2 billion cubic feet gas from Turkmenistan and this gas would be shared equally by Pakistan and India. Sources said that Pakistan would also need underground storages for gas reserves and the gas would be supplied to different areas of the country from these underground gas storages.

Pakistan and Iran have currently entered a dispute over the gas price that is the big hurdle to make further progress on the IPI gas pipeline project. The sources further said that Pakistani and Iranian officials were expected to meet soon in Tehran to resume dialogue on the gas price issue.

Iran has demanded an increase in price according to a new pricing formula; the earlier gas sales purchase agreement (GSPA) had been agreed between Pakistan and Iran.

Sources said that the steering committee on TAPI gas pipeline project was scheduled to meet in New Delhi during the current month, but the Mumbai carnage had caused a delay. Turkmenistan, during the meeting, was expected to present certification on its gas reserves, a demand made by Pakistan and India several times. Turkmenistan has failed so far to provide the gas reserves certification.