China to construct $2.5 billion Gwadar

ISLAMABAD: In a positive bid to cope with the bourgeoning energy crisis, the process to award the contract of $2.5 billion to China Petroleum Pipeline Bureau (CPPB) for erecting LNG terminal at Gwadar and laying down 711 kilometres long and 42 inches diameter pipeline from Gwadar to Nawabshah will be completed in November this year.

Both the components of the project will come on stream in December 2017. To this effect, the technical bid here on Wednesday opened as per the tender toeing the spirit of PPRA Rules.

“The Chinese state owned company — CPPB — has under the government-to-government arrangement deposited its technical and commercial bids for the $2.5 billion project, and we have examined and screened all the documents relating to the technical bid. However, the commercial bid will be opened in November once the evaluation of the technical bid gets completed,” Mubeen Saulat, Managing Director of Inter-State Gas System (ISGS), told media persons after the technical bid was opened.

However, the international consultant will also minutely examine the documents of the bids. The said Chinese company will not only construct the LNG terminal with a capacity to handle 500 million cubic feet gas per day with modern floating re-gasification and storage unit (FRSU), but also lay down 711 kilometres pipeline from Gwadar to Nawabshah with a capacity to carry 1.5 billion cubic feet gas per day.

“Both the components of the project will cost $2.5 billion,” Saulat said, adding that the said Chinese company will provide 85 percent investment and the government of Pakistan will provide 15 percent. The Chinese company will manage the loan from China Exim Bank and Pakistan will pay off the loan in 20 years’ time from the revenue of the project.

To a question, he said once the international sanctions on Iran are lifted, then this Nawabshah-Gwadar pipeline will be extended backward by 70 kilometres in six to eight months time from Gwadar to MP 250, a point at the Pak-Iran border, for the import of Iranian gas

And then the whole pipeline of 781 kilometres will be branded as the Iran-Pakistan (IP) gas pipeline.

From Iran, Pakistan will initially get 750 million cubic feet gas per day which will be increased up to 1 billion cubic feet gas per day. However, through LNG terminal, system will get 500 mmcgd gas per day which means that the gas pipeline will be carrying 1.5 bcfd gas in toto. Saulat claims that the project is a part of China-Pakistan Economic Corridor (CPEC) initiatives and it will be included in the early harvest projects.

According to Saulat, the Chinese company will be bound to get 30 percent component of the total project completed through Pakistani companies which are to be approved by the Pakistan Engineering Council (PEC).

Pakistan’s security agencies will be providing security to both LNG terminal and the pipeline. However, for the inside of Chinese officials and workers camp, Chinese security agencies will be responsible for the security.