China Revises Lower the Estimated Cost of Gwadar-Nawabshah Gas Pipeline in Pakistan

China Petroleum Pipeline Bureau has revised lower the estimated cost of laying the Gwadar-Nawabshah gas pipeline in Pakistan, Express Tribune, a local daily, reported Saturday.

The Chinese firm earlier estimated the contract price for the pipeline at $1.5 billion but the company has now lowered it to $1.3 billion in the financial bid given to Pakistani state owned firm Inter-state Gas Systems.

The pipeline would be 700km long with two compressor stations. It will carry the re-gasified natural gas (RLNG) from the proposed FSRU at Gwadar deep sea port. Earlier this month, Pakistan gave the green light to the Gwadar-Nawabshah LNG terminal & pipeline project. China will provide loans for both the projects equivalent to 85 percent of the cost of each project.

“The revised cost is even less than the cost at which gas utilities – Sui Northern Gas Pipelines and Sui Southern Gas Company – are augmenting their existing pipeline network to enhance the transmission capacity to 1.2 billion cubic feet per day,” an official told Express Tribune.

According to the official, Pakistan will negotiate a loan agreement with the Export-Import Bank of China that has already made an offer in this regard.

The South Asian nation has been facing severe gas shortage since last few years. The LNG terminal and pipeline project is expected to ease import of the fuel. Engro Corp currently operates Pakistan’s first FSRU through Engro Elengy Terminal Private Limited (EETPL).