Work on pipeline to begin this year: minister
ISLAMABAD, Feb 9: Pakistan would soon issue tenders to begin work on one of the three trans-national pipelines for natural gas import in 2005 to meet its growing energy requirements and to achieve a higher economic growth.
"A decision (to select one of the three pipelines) would be taken shortly and tenders would be issued and work would be started within 2005," Federal Minister for Petroleum and Natural Resources Amanullah Khan Jadoon said here on Wednesday.
Speaking at a news conference, the minister said a decision would soon be taken that which of the three pipelines - from Iran, Turkmenistan or Qatar - should be constructed first. Pakistan, he said, might have to construct another pipeline in later years.
Asked to comment on the Indian cabinet's decision to begin negotiations for gas pipeline projects, Mr Jadoon said he was not aware of that but Pakistan would welcome if India joined any pipeline project because it would make the project economically more viable.
He said he would accompany Prime Minister Shaukat Aziz during his visit to Iran at the end of this month to discuss the pipeline project.
The minister said the oil minister of Qatar was also due to visit Pakistan this month to discuss the possibility of laying a gas pipeline, while the oil minister of Turkmenistan would visit Islamabad in March to discuss the Turkmenistan-Afghanistan-Iran gas pipeline.
The minister said the government was preparing a 10-year plan to meet future energy requirements as the country would start facing gas shortages from 2010. The government, he said, also planned to increase the number of drilling of oil and gas wells to 75 per year.
Responding to a question, Mr Jadoon said that Turkmenistan had not yet submitted an audit report about the volume of Daulatabad gas reserves from where it wanted to export gas through the TAP gas pipeline project.
He, however, said that Turkmenistan had informed that it would submit a verification of gas reserves within 15 days. Once the Daulatabad gas field certification was available, the steering committee on the TAP project would meet to discuss its technical aspects.
Mr Jadoon said the Asian Development Bank had not yet submitted its study to the government of Pakistan that as to which of the three pipeline projects was more feasible and should be started first.
Speaking about the recent increase in consumer gas prices, the minister said the government had no other option in view of the perpetual increase of POL products in the international market.
He said the government was not in a position to lose more revenues after having sustained a loss of about Rs40 billion by not passing on the increase in oil and gas prices to consumers.
He said under agreements with foreign exploration companies, the wellhead prices were linked with international prices and had the government not increased the consumer prices, sovereign guarantees given to exploration companies would have been frustrated. He said the government was still providing a subsidy of Rs7.9 billion to domestic consumers and Rs15 billion to the fertilizer sector.
Responding to another question, the minister said on one litre of petrol being sold at Rs42.39, the government was charging a PDL of Rs9.30 per litre, 15 per cent GST (Rs5.53) and 88 paisa excise duty. In addition, oil marketing companies have their own margin of transportation cost from port to other parts of the country.