Pakistan's Ministry of Petroleum and Natural Resources has signed a memorandum of understanding (MOU) with Crescent Petroleum Co. International Ltd. of Sharjah, UAE, for building a long-planned gas pipeline from Qatar to Pakistan.
According to the terms of the agreement, the Sharjah-based company would finance, construct, and operate the proposed gas pipeline, which would deliver about 1.6 bcf/day of Qatari gas to Pakistan. The pipeline route reportedly would be mainly offshore in Iranian waters. It would extend from Ras Laffan through Hamriyah, then Dibba on the Gulf of Oman, terminating at Gadani, Pakistan. The section between Hamriyah and Dibba would be onshore.
The memorandum will be valid for 12 months. During that period, the two parties must negotiate a detailed agreement setting out their relationship and to sign a gas sale-purchase agreement, a statement from the ministry said. The extension of the MOU would depend on whether significant progress were made on the project and on the negotiations for further agreements.
Pakistan's Petroleum and Natural Resources Sec. Abdullah Yousuf signed the agreement on behalf of the government of Pakistan, while Ahsanullah Khan, director of Crescent Petroleum, signed it on behalf of the company.
Fantasy or reality?
This project was first proposed in 1991 but has never come to fruition. Since then, a competing project�dubbed the Dolphin project�has been initiated and is making significant progress in lining up agreements.
The $8-10 billion Dolphin project seeks to market and distribute gas from supergiant North field to Qatar, Dubai, Abu Dhabi, Oman, and ultimately across the Gulf of Oman to Pakistan. Other goals include development of petrochemical, power generation, and other industrial projects in these countries.
Dolphin is the brainchild of the UAE Offsets Group, which will hold a 51% stake in the project. Other backers are Enron Corp. and TotalFinaElf SA unit Elf Aquitaine, each with a 24.5% stake.
Dolphin has signed an MOU with Pakistan's petroleum ministry and its privatization commission. The agreement involves "potential economic cooperation," says UAE Offsets, and "sets the stage for the next phase of the Dolphin program to build partnerships with the local and international private sector for construction and operation of gas transmission and distribution systems in Pakistan."
The MoU is built around a provision for UOG to submit a firm proposal for the supply and transmission of 1.0-1.5 bcf/d of gas to Pakistan.
Crescent is looking at adding new backers for its planned pipeline, according to Dubai daily Gulf News.
The Crescent-led group planning the pipeline, called Gulf South Asia (GUSA), originally included Total, Brown & Root, and TransCanada Ltd. GUSA has long been pursuing the proposed project, but price differences and failure to find a committed offtaker for Qatari gas proved insurmountable.
It is unclear whether the former consortium members will agree to continue as backers of the project. But the gas for the pipeline is expected to come from TotalFinaElf's LNG interests in Qatar, reports Gulf News.
Crescent officials say the pipeline could be completed in 30-36 months at an estimated cost of $2.5-3 billion.
