Strategic retreat: NBP, OGDC burst the IP gas pipeline bubble

[KS]

ISLAMABAD: The government has faced a major set back in the Iran-Pakistan (IP) gas pipeline project as the country’s largest bank National Bank of Pakistan and the country’s largest exploration company Oil and Gas Development Company Limited on Thursday refused to finance it due to possible sanctions by the US.

Sources told The Express Tribune that a representative of National Bank of Pakistan (NBP) informed the steering committee on gas import projects on Thursday that it had branches in different countries of the world and therefore it feared that these branches could be closed due to US sanction against Iran.

Oil and Gas Development Company Limited (OGDCL) already cash constrained due to the circular debt said that its US investors, having a 1.6% share in the company, had threatened to retreat if the company financed the IP gas pipeline project.

The project, first proposed in the 1990s, has faced numerous delays. The United States last year said that Pakistan should be wary of committing to the proposed Iran-Pakistan natural gas pipeline.
The spiralling circular debt is another reason, another sources said. The Government Holding Company, however, is still committed to finance $60 million for the project.

TAPI project one step closer:

The steering Committee that met on Thursday also gave a go-ahead to sign the Gas Sales Purchase Agreement (GSPA) with Turkmenistan for Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project at 70 per cent parity of Brent oil. Pakistan earlier signed GSPA with Iran at gas price equal to 78 per cent of crude oil under Iran-Pakistan (IP) gas pipeline project. The TAPI gas pipeline project is valued at more than $3 billion.

Petroleum Minister Dr Asim Hussain confirmed to The Express Tribune that the steering committee had approved to hire a bank consortium of Pakistan and China including Habib Bank and Industrial and Commercial Bank of China Limited.The meeting informed that the government would generate Rs34 billion per year through charging Gas Development Cess (GDC) on natural gas to finance gas import projects, said an official.

The petroleum ministry also informed Prime Minister Yousaf Raza Gilani on Thursday during a meeting that the steering committee had approved the financial consultancy for Pakistan-Iran Gas Pipeline, which was a major step forward as far as the project was concerned.

Strategic retreat: NBP, OGDC burst the IP gas pipeline bubble – The Express Tribune

 

[idune]

While indians are in celebration, there are number of other options to finance such project. That is if the political will is there.

 

[lem34]

Celebrate all you want guys this is a long term geo strategic game which china russia iran and pakistan will win.

Read all the posts on here and things will become chrystal clear. Its just the timing iran and pak want it to ahppen now china and russia in 5 to 10 years

You should by reading that understand why tapi is guaranteed to fail

http://www.defence.pk/forums/strate...ies-between-pak-russia-china-iran-cars-4.html

 

[BATMAN]

If true than, this will be counted as one out if many other attempts to keep Pakistan away from growth.

Japan refuses to stop Iranian oil imports

 

[somebozo]

Few days ago we have a talk about Russia coming into the IP venture..and I am sure when there is a will there is a way..because firstly IP will be independent between Iran and Pakistan free of any third country interference, especially if that third country is Indo-US bit_h like Afghanistan. Secondly, it would terminate directly into Baluchistan hence can be connected to existing gas infrastructure.

 

[rohailmalhi]

What the point of being happy or busting the bubble .................

NBP cannot take part in this ,its OK we can come up with some mechanism to pay them , we are having bartar trade with Iran for more than a century now.

As far as the OGDCL is concern , they too dont have to worry , if some freak who is sitting million miles away dont want us to progress due to there ego then its time to let them go .1.6 percent share many companies are out there to buy that 1.6 percent of share. Even some guy in Karachi can do that .i am 110 percent sure of that .

ps: I totally love the immature behaviour of Bhartis when it come to Pakistan. Keep it up Indianos

 

[KS]

It's not about celebration. But just a reminder of ground realities where Pakistan cannot go against the third of the 3 A's that control it.Amreeka.

I saw a lot of fanbois who were jumping that US cannot stop Pakistan from going ahead with IP project. No.. if US wants, it can & Pak can no nothing about it.



p.s.:- I see a lot of dosti feelings for Russia here - the same infidel Russia that was allegedly sent packing by the ISI.

The clock has come a full circle..anyway the most pertinent question is the 'dosti' feeling reciprocated by the Russia or is this just a balloon full of hot air that will be burst at the opportune time ?

I feel its the latter.

 

[BATMAN]

^^ seriously... bharti's know nothing about what doosti with Pakistan means.

USA earned from Pakistani doosti.
China appreciate it.
Turkey trust our sincerity.
Now is Russian turn to taste our 'doosti'.

 

[Abhishek_]

please, not another chest beating of higher than mountain "dosti"

:facepalm:

(personally i wish PK is able to start this project, but I cringe every time people begin to claim dosti in international relations)

good luck to PK

 

[VCheng]

The IP line was always a non-starter, given de facto realities of sanctions and financing.

This should not be any surprise, nor the fact that this situation is not likely to change any time soon.

 

[idune]

Here goes indian and vcheng bubble as Chinese consortium seems to be financing the pipeline.

http://www.defence.pk/forums/strate...china-finance-iran-pakistan-gas-pipeline.html

 

[Patriot]

KS No worries mate - Financier found!

China to finance Iran Pakistan gas pipeline

The Pakistan government selected a consortium led by IBIC of China to arrange financing of the Iran-Pakistan gas pipeline project within 12 months in a move to finish the project as soon as possible and start importing Iranian gas supplies by December 2014.

The decision was taken in a meeting of the steering committee of the economic coordination committee led by Pakistani Petroleum Minister Asim Hussain and an inter-ministerial forum led by Prime Minister Yousuf Raza Gilani.

A senior government official said the steering committee of the ECC selected a consortium led by IBIC of China and comprising Habib Bank of Pakistan after completion of the bidding process to arrange financing through equity participation and underwriting in a period of 12 months.

The petroleum ministry, said the official, was also asked by the steering committee to take up increasing the gas quantities from Iranian pipeline from existing contract of 750 million cubic feet per day (MMCFD) to 1000 MMCFD. A reduction in gas price is also sought in the light of increased quantities.

These decisions would now be submitted to the ECC and subsequently to the cabinet over the next two weeks for formal approval and implementation.

Zardari insisted that the Iranian gas is needed to provide some relief from his country's shortages. These shortages have not only caused the failure of the gas companies providing to power plants, forcing them to turn to furnace oil, which has to be imported, but have also created severe difficulties for the domestic consumer.

He said Pakistan has sped up the pace of work on the Iran-Pakistan Gas Pipeline Project.

Highly-placed diplomatic sources told the Nation on Tuesday that the project, which was likely to be completed in 2014, might be completed one year ahead of its schedule, and the gas flow would start between June and December 2013.

Pakistan Petroleum Minister Asim Hussain said all physical surveys to lay 790-kilometre pipeline into Pakistan's soil have already been completed.

"China, ICPC and Habib Bank Limited have been chosen to act as financial advisers. China has also given assurances to financially help Pakistan construct this pipeline to complete this project on war footing," The Nation quoted Hussain, as saying.

"Our dependence on Iran-Pakistan pipeline was very high and there is no other substitute at present to meet the growing demand for energy," he added.

He said the Steering Committee would grant a formal clearance to the project before the tenders are floated to already short-listed contractors.
Fars News Agency :: Pakistan Expedites Work on Gas Deal with Iran

So happy now? Now i think we will see your strategic retreat from this thread and heart burn.

 

[OrionHunter]

While indians are in celebration, there are number of other options to finance such project. That is if the political will is there.

Don't spew nonsense! Why should Indians celebrate? Are you aware that this pipeline will eventually be extended to India to make up for the shortage of gas? It was to be only a matter of time. India needs Iranian gas as much as Pakistan does.

You seem to be inebriated with exuberance of your verbosity against anything to do with India. Jeeeez!

 

[KS]

So happy now? Now i think we will see your strategic retreat from this thread and heart burn.

Hope the Chinese stick around this time and not pack up like that mining company giving a lame excuse that security conditions are not conducive for investment in Pakistan.

 

[krash]

Don't spew nonsense! Why should Indians celebrate? Are you aware that this pipeline will eventually be extended to India to make up for the shortage of gas? It was to be only a matter of time. India needs Iranian gas as much as Pakistan does.

You seem to be inebriated with exuberance of your verbosity against anything to do with India. Jeeeez!

Not quite. The Indians backed out of the deal following US pressure. No more India in the 'pipeline', so to speak.