Pakistan ready with last part of LNG pipeline link to Iran

Islamabad aims for energy transit nation like Turkey.

Pakistan is ready to complete the short final pipeline spur that would enable it to import natural gas from Iran once sanctions are lifted, according to the head of one of Pakistan’s state energy companies.

“In the very near future we expect delegations from the two countries to meet,” said Zahid Muzzafar, the chairman of Oil and Gas Development Company, which is government-controlled, but has publicly traded shares on the Karachi and London exchanges.

“Once we get the right signals from the international community and our own government’s decision we are all set to build that pipeline,” Mr Muzzafar said, referring to the expected lifting of international sanctions related to Iran’s nuclear programme that have restricted its oil and gas exports since 2011. Final clearance is expected this month.

The pipeline spur would run from Pakistan’s port city of Gwadar, where it has nearly completed its first liquefied natural gas (LNG) intake plant, to Iran’s border 80 kilometres away. Pakistan has a rapidly growing need for natural gas and is also building a pipeline from Gwadar to the middle of the country as part of a network of pipelines that will include supply via Turkmenistan–Afghanistan–Pakistan–India Pipeline, or Tapi.

Pakistan has long-term aims to be an energy transit country uch as Turkey, which connects central Asian oil and gas supplies to Europe and the rest of the world via pipelines that include the one that terminates at the Mediterranean port of Ceyhan. Pakistan’s strategy would link supplies in central Asia, including Turkmenistan, as well as Iran – which rivals Russia as the world’s largest holder of gas reserves, to the huge markets in China and India, as well as serving its own growing demand.

Mr Muzzafar said additional supplies from Iran can be linked into the system that is being developed currently, which includes a US$2.5 billion project to complete the LNG terminal at Gwadar and pipeline it 700km to Pakistan’s mid-country, terminating at Nawabasah.

First LNG cargo was bought on the spot market from Qatar. Pakistan has tendered for 60 cargoes over five years. Mr Muzzafar said, and the first successful bidders were Gunvor, a Geneva-based trading house, and Royal Dutch Shell.

The China-Pakistan Economic Corridor, a $46bn multi-pronged mega project, plans to link Gwadar, Khuzdar and other western Pakistan areas via roads, rail and pipelines to Dera Ghazi Khan, Dera Ismail Khan and Peshawar in the east, and onto the western Chinese city of Kashgar, 3,000km away.​

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