Crisp detour for Tapi as Pakistan looks for gas value cut

The multi-billion dollar Turkmenistan-Afghanistan-Pakistan-India (Tapi) Pipeline venture has hit crisp tangles as its two significant partners and forthcoming gas buyers — Islamabad and New Delhi — have looked for gas value openers before the undertaking could physically take off. On Wednesday, Pakistan officially established a five-part value arrangement advisory group (PNC) to start converses with Turkmenistan for value cut after specialists would its current costs sensibly higher than Liquefied Natural Gas (LNG) being imported from Qatar and different nations. The two nations have just consented to talk about the value opener starting one month from now. Maybe following in the strides, India is likewise answered to have independently kept in touch with the Turkmen experts for value decrease. The 1820-km pipeline — worth around $8 billion — had visualized about 1.3bn cubic feet of flammable gas every day (BCFD) each to Pakistan and India. What’s more, the foreseen withdrawal of US powers from Afghanistan additionally gives off an impression of being another negative factor for global imminent agents to promise enormous ventures.

On Wednesday, a gathering of the Economic Coordination Committee (ECC) of the Cabinet was unequivocally told by Prime Minister’s Special Assistance on Petroleum Nadeem Babar that current gas cost under the Tapi venture sometimes fell short for Pakistan, senior government authorities told Dawn.

Imports from Turkmenistan considered industrially unfeasible; ECC comprises exchange advisory group

“Under existing recipe, the gas import from Turkmenistan is industrially unfeasible”, Mr Babar was cited by authorities as telling the gathering.

The gathering directed by Prime Minister’s Adviser on Finance and Revenue Dr Abdul Hafeez Shaikh then comprised the five-part board of trustees to renegotiate gas costs with Turkmenistan. The ECC “gave endorsement for the constitution of the PNC for Tapi Gas pipeline venture,” an official declaration said.

The PNC will arrange the cost with Turkmen gas. The board of trustees will comprise of the accompanying individuals; Secretary, Ministry of Energy (Petroleum Division) as director. Secretary Finance or his chosen one, Joint Secretary, Ministry of Energy (Power Division), Director General (Gas)/Director (Gas) and Managing Director, SSGCL as individuals, the declaration included.

Authorities said Mr Babar told the ECC that Turkmen gas cost for Pakistan was 5-10 percent higher than LNG accessible to it.

What’s more, the LNG instrument gave adaptability to the buyer regarding gas amounts and residency of provisions while gas pipeline once developed couldn’t be relinquished or changed and thus included long haul liabilities going past 15-20 years.

Accordingly, except if funneled gas was ­significantly less expensive than sent LNG, there was no motivation for Pakistan to seek after it.

The ECC was informed that Petroleum Division had just given a notification to the Turkmen side gave under the gas deals and buy consent to renegotiate gas cost.

Accordingly, Turkmenistan had consented to examine the issue and would send a group Pakistan one month from now.

Educated sources said the pipeline venture had two-staged development plan by the Turkmenistan which held about 85pc stakes in the joint Tapi Pipeline Company with 5pc shareholding each from Pakistan, Afghanistan and India.

Since India had been raising security ensures for the pipeline to go through Pakistan regions, Turk­menistan had arranged a pipeline without blowers to convey 1.3BCFD gas to Pakistan which could multiplied with expansion of compacting stations if there should arise an occurrence of India’s strong responsibility for gas consumption.

PSO, Steel Mills issues

The ECC likewise guided Ministry of Finance to investigate the conceivable outcomes for improving the liquidity position of Pakistan State Oil (PSO) which endured trade misfortunes of around Rs28bn on FE-25 advances. The advances were obtained under the guidelines of Ministry of Finance for financing of import tasks of PSO without drawing down outside trade stores of the State Bank of Pakistan.

Account Ministry guaranteed the ECC of use of conceivable all subsidizing choices in the progressing monetary year and any lack in the assets will be engaged in the up and coming spending plan in perspective on the IMF limitations on monetary activities and advantageous budgetary awards.

ECC conceded expansion of Government of Pakistan ensure against credit office of National Bank of Pakistan adding up to Rs5bn to Utility Stores Corporation of Pakistan.

On the solicitation of the Ministry of Water Resources ECC allowed endorsement to Wapda to raise a crisp credit worth Rs17.5bn from Allied Bank of Pakistan with one-year residency and GoP ensure. The crisp advance was required to settle about Rs38.12bn credit shrunk by Wapda from Habib Bank Limited a couple of years back for installment of net hydel benefit to territories.

A measure of Rs18bn had been reimbursed to the HBL while another Rs2.5bn would be organized by the Central Power Purchasing Agency (CPPA) from its own assets.

The ECC likewise allowed leeway under Prudential Regulations R-4(clause 1a and 2) from the State Bank of Pakistan to dispense the office at first against a letter of solace.

ECC likewise affirmed a Rs1bn Technical Supplementary Grant for foundation of Pakistan Tourism Development Endowment Fund under open record. Dr Shaikh guided the Pakistan Tourism Development Corporation to think of a travel industry improvement and delicate picture advancement plan in the following gathering.

The ECC likewise conceded endorsement of distribution of Gas from PGNiG’s RIZQ Gas Field to M/S SSGCL. It was advised to the ECC that as of now 2 wells in particular Rizq-1 and Rizq-2 are delivering 16 mmcfd gas from Rizq gas field, which are allotted to M/s SSGCL, though Rizq-3 which is under penetrating, is relied upon to add another 9 to 10 mmcfd gas to the current creation.

Endless supply of this well, the aggregate gas creation from this gas field is relied upon to raise up to 25 mmcfd. The cost of the gas will be as per the relevant Petroleum Policy.

On an interest moved by the Ministry of Industries and Production for Rs3.02bn for the installment of exceptional SSGC levy by Pakistan Steel Mills (PSM) by virtue of gas charges, the ECC established a three-part council drove by Secretary Finance to discover a possible answer for the issue with the goal that the as of now assigned spending plan may not be surpassed and the liabilities of both SSGC and PSM were appropriately settled.

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