China to Finance LNG Terminal, Pipeline Project in Pakistan

Beijing and Islamabad have signed a deal under which China will finance the LNG terminal and pipeline project in Pakistan.

According to initial estimates, the project is expected to cost $3 billion – $1 billion will be needed to lay the pipeline from Gwadar and over $2 billion will be required to construct LNG terminal and re-gasification facilities and to develop large storage facilities, said Express Tribune newspaper report published Tuesday.

“The agreement was signed during Prime Minister Nawaz Sharif’s visit to China. It is a state-to-state deal and no bidding will be held for the award of contract,” an official told Express Tribune.

China will meet 85% of the financing needs for constructing the pipeline from Gwadar Port to Nawabshah.

This will be the second LNG terminal in the country as a fast-track terminal is already being built by Elengy Terminal Pakistan Limited (ETPL) at the Port Qasim, which is likely to be completed in February next year.

Pakistan hopes to extend the pipeline from Gwadar to Iran for gas import when sanctions on Tehran are lifted.

The pipeline will have the same specifications that were proposed for the Iran-Pakistan gas pipeline, Express Tribune added.

According to officials, since Pakistan has not been able to lay a 781km pipeline from the Iranian border to Nawabshah because of its failure to tap foreign finances, it has decided to build the pipeline from Gwadar to Nawabshah in partnership with China.

This will transport at least 500 million cubic feet of gas per day (mmcfd) after re-gasification of imported LNG.