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Iran-Pakistan Gas Pipeline Project Sovereign Guarantee Agreement
Islamabad, May 28, Iran-Pakistan Gas pipeline sovereign Guarantee agreement was signed on Friday.
The agreement was signed by Managing Director National Iranian Gas Company Seyyed Reza Kasaezadeh and Pakistan's Joint Secretary, Ministry of Petroleum and Natural Resources Irshad Kaleemi.
Minister for Petroleum Naveed Qamar and Secretary Petroleum and Natural Resources Kamran Lashari, too, witnessed the ceremony.
The Gas Sale and Purchase Agreement (GSPA) between Pakistan and Iran is for the import of 750 million cubic feet daily (mcfd) of natural gas with a provision to increase it to 1 billion cubic feet per day (bcfd).
The imported gas volume is nearly 20% of Pakistan’s current gas production and supply is for a contracted period of 25 years, renewable for another 5 years. The whole imported gas from Iran will be dedicated to Pakistan's power sector. The imported gas volume will support approximately 5,000 Megawatts (MW) of power generation and will result in significant annual saving when compared with the alternative fuels like HSFO, LNG, Coal etc.
As a part of the Conditions Precedent (CPs) to be completed by Parties to make the GSPA effective on Friday, the Government of Pakistan is providing ‘Performance Guarantee’ on behalf of InterState Gas Company.
While all other CPs of the GSPA are completed, the project is now ready to enter into its implementation phase. As per current Project Implementation Schedule, the first gas flow is targeted by end 2014.
The project is planned to be funded through public/private partnership. The capital cost for the Pakistan section is estimated at US$ 1.65 billion.
The construction of pipeline will also create job opportunities, vocational training and health facilities and social uplift in backward areas of Balochistan and Sindh. Natural gas fuel will ensure substantial carbon credits being an environmental friendly fuel.
The IP project shall be another testimony of the long historic and cordial relationship between two brotherly countries.
Earlier this year, the Executive Vice President of the OMV Aktiengesellchaft Jaap Huijskes paid a courtesy call on the Federal Minister of Petroleum and Natural Resources here Friday and discussed matters of mutual interest. Huijskes has recently joined OMV in April 2010.
The minister said that it was encouraging to see OMV operating in Pakistan for twenty years, adding that he looked forward to seeing more activity and investments in upstream petroleum sector of the country and in new areas particularly tight gas and off-shore. OMV is the biggest exploration and production foreign oil operator in Pakistan.
The agreement was signed by Managing Director National Iranian Gas Company Seyyed Reza Kasaezadeh and Pakistan's Joint Secretary, Ministry of Petroleum and Natural Resources Irshad Kaleemi.
Minister for Petroleum Naveed Qamar and Secretary Petroleum and Natural Resources Kamran Lashari, too, witnessed the ceremony.
The Gas Sale and Purchase Agreement (GSPA) between Pakistan and Iran is for the import of 750 million cubic feet daily (mcfd) of natural gas with a provision to increase it to 1 billion cubic feet per day (bcfd).
The imported gas volume is nearly 20% of Pakistan’s current gas production and supply is for a contracted period of 25 years, renewable for another 5 years. The whole imported gas from Iran will be dedicated to Pakistan's power sector. The imported gas volume will support approximately 5,000 Megawatts (MW) of power generation and will result in significant annual saving when compared with the alternative fuels like HSFO, LNG, Coal etc.
As a part of the Conditions Precedent (CPs) to be completed by Parties to make the GSPA effective on Friday, the Government of Pakistan is providing ‘Performance Guarantee’ on behalf of InterState Gas Company.
While all other CPs of the GSPA are completed, the project is now ready to enter into its implementation phase. As per current Project Implementation Schedule, the first gas flow is targeted by end 2014.
The project is planned to be funded through public/private partnership. The capital cost for the Pakistan section is estimated at US$ 1.65 billion.
The construction of pipeline will also create job opportunities, vocational training and health facilities and social uplift in backward areas of Balochistan and Sindh. Natural gas fuel will ensure substantial carbon credits being an environmental friendly fuel.
The IP project shall be another testimony of the long historic and cordial relationship between two brotherly countries.
Earlier this year, the Executive Vice President of the OMV Aktiengesellchaft Jaap Huijskes paid a courtesy call on the Federal Minister of Petroleum and Natural Resources here Friday and discussed matters of mutual interest. Huijskes has recently joined OMV in April 2010.
The minister said that it was encouraging to see OMV operating in Pakistan for twenty years, adding that he looked forward to seeing more activity and investments in upstream petroleum sector of the country and in new areas particularly tight gas and off-shore. OMV is the biggest exploration and production foreign oil operator in Pakistan.