ISLAMABAD - The Economic Coordination Committee (ECC) of the Cabinet on Thursday approved the $3 billon mega project ‘Gawadar-Nawabshah LNG Terminal and Pipeline Project’.

The ECC, which met under the chairmanship of Finance Minister Senator Ishaq Dar, considered the summary of the Ministry of Petroleum and Natural Resources to build the LNG terminal and pipeline through a Government-to-Government (G2G) arrangement with China.  The top economic decisions making body of the country, ECC, approved the summary to construct a 711-km gas pipeline from district Nawabshah to Gwadar to connect the proposed Liquefied Natural Gas (LNG) terminal with 42-inch diameter pipeline which shall be laid and 2 compressor stations constructed. The terminal will have the capacity to handle up to 500 mmcfd of gas. Interstate Gas Systems (Pvt) Limited (ISGS) will be authorized to execute the implementation of the project.

Sources in Ministry of Petroleum and Natural Resources informed that two Chinese companies have already shown interest in building the LNG terminal at Gwadar and lay down the pipeline. The pipeline will require $1 billion and over $2 billion will be needed to construct the terminal with LNG handling and re-gasification facilities and to erect large LNG storages facilities.

Sources added that Gawadar-Nawabshah LNG terminal would be the second LNG terminal as the first fast track terminal is being constructed by Engro’s ETPL (Elengy Terminal Pakistan Limited) at Port Qasim, which is scheduled to be completed by March 31, 2015 but the Gawadar-Nawabshah LNG terminal will be completed by December this year.

Meanwhile, they further informed that whenever the US sanctions would be lifted, the Nawabshah-Gwadar pipeline will be extended from Gwadar to MP 250, a point at Pak-Iran border for the import of Iranian gas. Finance Minister, while approving the project in principle, advised the Ministry of Petroleum and Natural Resources to finalize the funding plan preferably on Government-to-Government basis or BOT/BOO basis.

According to the official handout, the meeting dilated at length on the proposal submitted by Ministry of Textile and Industry for allowing support price for seed cotton 2014-15 crop. The support price recommended by Agriculture Policy Institute (API) of Rs. 3000/- per 40 kg for base grade 3 cotton was approved to benefit the farming community. The Trading Corporation of Pakistan (TCP) will accordingly procure one million bales of cotton at the support price. Finance Minister said,” Government is aware that the recent floods have badly affected a large part of the agriculture sector. We are cognizant of difficulties faced by our farmers and we shall fully support them in this hour of need.” The ECC also considered and approved with amendment the proposal submitted by Ministry of Industries and Production for Determination of local manufacturing status of machinery, equipment and other capital goods (energy sector) in light of the 2014-15 Finance Bill.

Further, it was also decided to facilitate local manufacturers and provide them a level playing field. Accordingly, a working committee is to be formed by the Federal Board of Revenue with representation from Ministry of Industries/National Tariff Commission, EDB, Board of Investment and local manufacturers of energy equipment to review whether appropriate incentives can be offered to manufacturers to address their grievances and enhance their competitiveness for increased local and export sales.

The meeting was attended by Minister for Industries and Production Ghulam Murtaza Jatoi, Minister for Information, Broadcasting and National Heritage, Senator Pervez Rashid, Minister for National Food Security and Research, Sikandar Hayat Bosan, Minister for Petroleum and Natural Resources, Shahid Khaqan Abbasi, Secretaries of various Divisions and heads of different departments.