Pakistan plans project company for funding of IPI gas pipeline

Government has planned to set up a separate project company to generate funding for materialising the billion dollars Iran-Pakistan-India (IPI) gas pipeline project.
The petroleum ministry said that for the funding of the IPI Project, it is planned to set up a separate project company that will raise funds through capital resources by issuance of equity to potential investors and raising debt in the local and international market.

The Ministry also clarified in the statement that the summary recommendations moved to Economic Coordination Committee (ECC) of the cabinet was to issue policy guidelines to OGRA to approve the revenue requirements of the ISGS incurred on the development of gas imports projects, and not for the funding of IPI gas pipeline project, as reported.
A number of news items appeared in the press regarding funding arrangements of revenue expenditure of the Interstate Gas System as approved by ECC in its meeting held on September 10, 2008.

In this respect, Ministry ofPetroleum and Natural Resources has noted that the referred news items carry a gross misunderstanding of the recommendations made by the Ministry and the ECC approval.
The second misunderstanding is regarding the impact of ISGS revenue expenditure on the consumer tariff.