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Conditional World Bank loan for gas pipelines

Pakistan will have to establish that its gas sector...

Pakistan will have to establish that its gas sector could meet country's power sector demand on a sustainable basis to qualify for the assistance from World Bank for the development of private sector gas pipelines, learnt Dawn.

The four-member fact finding mission of the World Bank on Pakistan's gas pipelines started its deliberations here on Tuesday. The mission comprising Marc Heitner, Waqar Haider, Rashid Aziz and Ralph G. Schwimmbeck held separate meetings with the Secretary Petroleum, Abdullah Yousaf; Director General Gas Khalid Naseem; Director General Petroleum Concessions Shahid Ahmad; Senior Joint Secretary Water and Power Engineer Syed Ibrahim Shah; and representative of Japan Bank for International Cooperation (JBIC) Katsumi Uchida.

The mission was told that the current gas requirement in the country's power sector is estimated at around 1200 MMCFD (million cubic feet per day). This included 300 MMCFD in Karachi Electric Supply Company (KESC) and 900 MMCFD in Wapda system. The demand in power sector is estimated to go up by two to three times in next 10 years, official sources told Dawn.

Against this demand, total gas supply estimates including from new discoveries have been estimated at around 1000 MMCFD. In this situation, it was premature to establish gas sector's ability to meet even current requirement of around 1200 MMCFD of natural gas in the power sector, sources said.

The government in collaboration with private sector will have to carry out detailed studies whether the gas reserves were enough to meet power sector demand so that multinational pipeline companies and international financiers could be attracted for the development of pipeline system.

The World Bank mission is here to assist Pakistan in developing private sector gas pipelines through multinational energy firms and international financiers to link its power and industrial sector with the untapped gas reserves.

The mission, will look into measures on how private gas pipelines could introduced optimally in Pakistan and to develop the necessary policy framework including issues relating to Gas Regulatory Authority (GRA).

The bank is of the view that infrastructure bottlenecks, particularly gas pipelines prevent Pakistan from taking full advantage of its recent gas discoveries and to substitute for fuel oil which is imported at a high cost for use in thermal power plants.

It believed that while the government is to take some more time to restructure and privatize Sui Northern Gas Pipelines Ltd (SNGPL) and Sui Southern Gas Company (SSGC), one way of accelerating development is to introduce the concept of private gas pipelines into Pakistan, preferably in such a way that the government does not bear the commercial risks, sources added.