ECC meeting: Punjab to get 75% of TAPI gas

ISLAMABAD: 2Three-fourths of the gas imported under the multibillion-dollar Turkmenistan-Afghanistan-Pakistan-India (Tapi) gas pipeline project will be allocated to Punjab in a bid to help it overcome severe energy shortages, the federal government decided on Saturday.
The Economic Coordination Committee (ECC) of the Cabinet endorsed the petroleum ministry’s proposal to allocate 994 mmcfd or 75 per cent of gas from the Tapi pipeline to the Sui Northern Gas Pipelines Limited (SNGPL), which serves Punjab and Khyber-Pakhtunkhwa (K-P), an official handout said.
The remaining quarter or 331 mmcfd of Tapi gas will be allocated to the Sui Southern Gas Company (SSGC).
The proposal mainly aims to overcome the shortfall in the country’s northern gas system; the shortage affects only Punjab, where the utility company is forced to carry out a gas rationing plan.
But it would still enable both SNGPL and SSGC to reduce the demand and supply gap on their systems. Currently, the SSGC rations gas for one day only and that too for industrial consumers.
Last month, the Tapi steering committee decided to complete the $10 billion mega project by October 2019. It also finalised the requisite framework and timelines of various tasks leading to accomplishment of the pipeline scheme of the region. The project envisages transportation of 30 billion cubic meters of Turkmen gas annually to Pakistan via Afghanistan.
The initial cost estimates of the project were $7.6 billion. After including the cost of developing gas fields in Turkmenistan and other allied expenses, the cost is expected to go up to $10 billion.
The US has long been pushing Pakistan to give preference to Tapi over the Iran-Pakistan (IP) gas pipeline amid threats of sanctions if Islamabad goes ahead with the latter project.
Other decisions
The ECC on Saturday conditionally allowed four fertiliser manufacturing plants to import re-gasified liquefied natural gas (LNG) to meet their gas input requirements. The fertiliser plants will use the SNGPL network with prior permission from the petroleum ministry. The decision will facilitate the old Engro Fertiliser Plant, Pak-Arab Fertiliser Plant, Dawood Hercules Fertiliser Plant and Fatima Fertiliser Plant.
However, despite signing LNG import deal with Qatar, the government is not sharing the details of the $21 billion contract, raising suspensions about the transaction. The deal was expected to be tabled in front of the ECC but there was no official announcement in this regard.
The ECC also approved a Rs84 million supplementary budget to pay the salaries of the employees of Printing Corporation of Pakistan (PCP). The government has not paid four months’ salaries to PCP employees, during the period from December 2014 to March 2015. PCP is facing severe financial challenges at a time when the Election Commission of Pakistan (ECP) has been directed by the apex court to hold local bodies’ elections. The ECP has complained about the capacity constraints of the PCP and argued that it cannot undertake the uphill task of printing the ballot papers on time.
The ECC also allowed Attock Cement Pakistan Limited (ACPL) to remit $24 million for establishment of Cement Grinding Unit in Basra, Iraq on account of equity investment starting from March 2015 onwards. The proposed investment venture is expected to bring foreign exchange through dividends repatriation and growth in clinker exports. As ACPL intends to hire 50% of its labour force from outside Iraq, the venture is expected to create employment opportunities for the Pakistanis.
While the economic decision making body allowed Attock Cement to remit money, it has yet to take a similar decision on a request of Arif Habib Group to remit $300 million for setting up a fertiliser plant in the United States.
The ECC also allowed equity investment for purchase of additional shares by RAK Ghani Glass Limited in the UAE costing approximately $2.3 million.

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