ISLAMABAD: The Cabinet Committee on Energy (CCoE) will take up the implementation of 1,100 kilometre North-South Gas Pipeline (NSGP) project in its meeting on Thursday (tomorrow).
The meeting is scheduled to to take up three summaries of Power and Petroleum Divisions — High Sulphur Furnace Oil (HSFO) and Low Sulphur Furnace Oil (LSFO) demand for power plants and release of subsidy; gas sector reforms; unbundling of gas utility companies and implementation status of the NSGP Project.
Planning, Development and Special Initiatives Minister Asad Umar will chair the meeting.
It is relevant to note that the Supreme Court (SC), in its judgment dated August 13, 2020, on the Gas Infrastructure Development Cess (GIDC) had directed that the federal government should take all steps to commence work on the laying of the NSGP within six months.
Reportedly, the inter-governmental agreement (IGA) was signed with the Russian Federation in 2015 under build–own–operate–transfer (BOOT) arrangement.
Progress on the NSGP project remained debilitated as both sides could not agree on a sanction-free and commercially viable Russian project implementation agency. In view of the GIDC decision, the pipeline can be self-financed.
However, consultations of the Petroleum Division with stakeholders unequivocally pointed out that this project (NSGP) is demonstrative of strategic engagement with the Russian Federation. The Ministry of Foreign Affairs has also reiterated the importance of the project and personal interest of Russian President Putin to initiate the project at the earliest.
On September 7, the energy minister wrote to his Russian counterpart, informing him about the GIDC decision and that the IGA requires an amendment to reflect changes in the capital structure. The Russian side was also invited for talks to bring about the amendment to the IGA and agree on next steps including establishment of a Russia-Pakistan Special Purpose Vehicle.
Similarly, a video conference was held with the new Deputy Minister of the Russian Federation to explain the changes needed in the capital structure. However, a formal response and nomination of a technical team by Russian side are still pending.
Sources said that the Petroleum Division while keeping cognizance of the timelines involved, has been undertaking certain activities with respect to NSGP.
They said that so far, land acquisition for the NSGP route –850km from Nawabshah to Lahore – has begun.
Meanwhile, the process for obtaining land route clearance from the Ministry of Defence for the 230km corridor of NSGP from Nawabshah to Port Qasim has been initiated as this was not part of the original design.
They said Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) have been engaged to assist in acquiring the right of way and land acquisition for the entire route of NSGP project.
Keeping the domestic and industrial requirement of the country in mind, as well as the need for two new terminals plus and expansion of the existing terminals, the designed transmission capacity of NSGP has been enhanced from 1.2 to 1.6 Billion Cubic Feet per Day (BCFD).
A request has been made to the GIDC board for allocation of funds for the project, said sources.
