Pakistan to push ahead with Qatar gas pipeline

After nearly three years, Pakistan plans to push ahead with the $ 2.7 bn Gulf-South Asia gas project, which will deliver Qatar gas through a 1,600 km pipeline to Pakistan. The Pakistan government has scheduled a meeting with Crescent Petroleum of Sharjah on January 20 to start the ball rolling.
The government has decided to take action after a detailed review of its gas requirements was completed and showed a critical need to make progress with the GUSA project if it is to meet its long term requirements. Crescent signed a heads of agreement with the Qatar government in 2000 giving it exclusive right to export gas to Pakistan. It also entered into a Memorandum of Understanding (MoU) with the Pakistan government that year.

But it is only now, after the year-long review showed up a possible huge shortfall in supply, that Pakistan has taken steps to move the project forward. The review showed that by 2010 Pakistan could face a shortage of as much as 700 mm cf of gas. This could widen to 2.2 bn cf by 2015 mainly because of the depletion of the country's domestic reserves.
Alarmed, the government went into overdrive and turned once more to the Qatar project, said a source. The project had been put on hold following the discovery of significant reserves of gas on Pakistan territory during the past two years.

The equivalent of more than 1 bn cfpd of gas for domestic distribution was believed to be available, sources said. This considerably reduced the gap between and supply and demand in Pakistan for the near future.
The source said: "Two years ago, Pakistan was under great pressure to press ahead with the project because it was importing expensive fuel oil to bridge the gap between demand supply of gas. The discovery of domestic gas reduced the pressure to make progress with the project and it was put on the back burner." As a result of the delay the cost of the project has climbed to $ 2.7 bn from previous estimates of $ 2.4 bn.