Home » Business & Finance » Rs203bn Gwadar-Nawabshah LNG pipeline project approved


ISLAMABAD: The Executive Committee of the National Economic Council (Ecnec) on Friday approved six development projects worth Rs281 billion, including import of 58 locomotives, Gwadar-Nawabshah gas pipeline and a terminal at Gwadar for handling imported liquefied natural gas (LNG).

All these projects will have combined foreign financing of about Rs164bn.

In a meeting presided over by Finance Minister Ishaq Dar, the country’s highest development project approval authority approved Gwadar-Nawabshah LNG terminal and pipeline project at a cost of Rs203.314bn including foreign exchange Chinese loan of Rs135.128bn. The project was previously approved by the Economic Coordination Committee (ECC) of the Cabinet in 2014 for completion in November 2015. But it has now been delayed until 2018 due to internal issues of the petroleum ministry and the agencies concerned.

“The project is expected to complete in two years (2016-18),” confirmed a statement issued by the finance ministry. The project aims to overcome the shortage of natural gas supply by importing LNG at Gwadar and then transmit it to Nawabshah through a 700-kilomtere pipeline having a diameter of 42 inches.

The government has already decided to award the contract for the project to a Chinese firm — China Petroleum Pipeline Bureau — on a build-own-and-operate basis for which Export-Import Bank of China would provide a commercial loan of about $1.35bn.

The pipeline would also facilitate Iran-Pakistan pipeline project. The terminal will have the capacity to handle up to 600 million cubic feet per day (mmcfd) of gas.

Ecnec also allowed the Ministry of Railways to procure 58 diesel electric locomotives at a revised cost of Rs16.3bn, including a foreign loan of Rs11.755bn. The procurement will be completed by December. The proposed locos will replace 50 over-aged locomotives and will be used to haul freight and passenger services along with high-capacity wagons fitted with air brakes and roller bearing. The capacity of Pakistan Railways is expected to improve after the project’s completion.

The meeting also approved package-III of Balochistan’s irrigation department project for construction of 20 small dams in different districts of the province at a cost of Rs7.83bn.

The project is targeted for completion in three years to help the province harness flood flows and supply about 175,500 acre-feet of conserved flood water for direct irrigation and drinking purposes. It is expected to benefit about 58,500 acres of fertile cultivable land and save the land from flood damages and create jobs.

Ecnec directed the Planning Commission to set up a monitoring committee to make sure that the project was completed in three years. This committee will also have a member from the Ministry of Water and Power to look after the implementation.

The meeting also approved Southern Punjab Poverty Alleviation Project ) at a total cost of Rs4.658bn, including Rs4.14bn international soft loan from the International Fund for Agricultural Development (IFAD). It will help improve the standard of life in four less-developed districts of Punjab, ie Bahawalpur, Bahawalnagar, Muzaffargarh and Rajanpur.

The IFAD has helped in the financing of the project through a soft loan of $40.13m. The project will help reduce poverty in the areas of Southern Punjab by generating more income, increasing agricultural productivity, improving livelihood opportunities, providing vocational training, especially to women, and building physical infrastructure to improve the quality of life. The project is expected to complete in 2017.

The meeting also cleared the 106-megawatt Golan Gol Hydropower project in Chitral, Khyber Pakhtunkhwa, at a cost of Rs29.077bn, including foreign exchange component of Rs10.68bn. The project would generate an annual energy of about 436 gigawatt hours. The project will be connected with the national grid with a 198km transmission line from Golan Gol to Timurgarha passing over Lowari pass and then reaching Chakdara.

Ecnec also approved a project of Peshawar Electric Supply Company to construct 7th secondary transmission line and grid stations at a cost of Rs20bn, including foreign loan of Rs1.92bn. The project will be completed in five years.

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