Pakistan Pushes Tendering of Gas Pipeline with $500 Million from Iran

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Pakistan and Iran seem determined that the pipeline project between the two countries, which has been blowing hot and cold since 1996, will go forward despite opposition to the project from the U.S and lukewarm support from other countries in the region.

Pakistan's state-owned Inter State Gas Systems (ISGS), part of the country's Ministry of Petroleum and Natural Resources, has issued an invitation for pre-qualification for the engineering, procurement, construction and commissioning) tender for the 1,724-kilometer pipeline project.

The project scope is for a pipeline to transport high-pressure natural gas from an offtake point near the port city of Gwadar to gas integration near Nawabhsah.

The technical department at ISGS said that decisions could be expected up to 60 days after the final day of submission. Tendering companies can offer the project either on an EPC or turnkey basis. The timing of the decision will also depend on the number of applicants. The contractor will install three compressors between the Iranian border and Nawabshah in addition to constructing the pipeline within a two-year period.

Winners of the contract will be exempt from general sales tax duties, taxes and services for the imported machinery, and technical and financial proposals can be submitted until June 8. Foreign contractors not registered with the Pakistan Engineering Council will have to submit an undertaking register with the Pakistan Engineering Council before any contract is awarded.

It is reported that gas is expected to begin flowing by a target date of December 2016. The project will require an investment of up to $1.8 billion. Iran has offered $500 million funding to Pakistan to construct its section of the pipeline.

For related information see March 20, 2012, article - Pipeline Politics Drive Sweden, China to Cool on Iran-Pakistan Gas Route.

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