At the time of writing, Inter State Gas Systems (ISGS) – a company set up by the Pakistani Government to develop, own and operate the Pakistani section of the $US1.2 billion Iran – Pakistan (IP) gas pipeline – was inviting expressions of interest from linepipe manufacturers for the manufacture, supply and delivery of approximately 335,000 tonnes of pre-coated API 5L Grade X70 steel linepipe.

This pipe will be used for the 42 inch diameter, approximately 800 km onshore section of pipeline which will extend from the Iran-Pakistan border to the Pakistan offtake point near Nawabshah. This section will have the capacity to transport 1 Bcf/d of natural gas.

Background

The idea for the IP gas pipeline was formulated as early as the 1990s, and after extensive discussion between Iran, Pakistan and India, an agreement was signed between Pakistan and Iran for the construction of a pipeline between South Pars and Karachi in 1995. However, the project was put on hold for a number of years following the discovery of new gas fields in Pakistan and the onset of civil war in Afghanistan.

Article continues below…

In 2003, Iranian President Mohammed Khatami’s visit to Pakistan brought the project back into the spotlight as the two sides discussed ways to foster better economic ties between the countries. At this time, the project planned to include India in its route, with a study by BHP Billiton envisioning a 2,670 km pipeline originating at Assaluyeh, Iran, and terminating at the Indian border in the western state of Rajasthan, with a tap-off point at Multan in Pakistan. However, a strained political relationship between Pakistan and India ensured that little was finalised for a number of years.

In May 2009, Iran and Pakistan signed a gas sales purchase agreement to facilitate the development of the pipeline, but India refrained due to security concerns. Later that year, Pakistani officials said that India had definitely opted out of the pipeline, however, Iranian officials are said to have denied these comments.

Iran and Pakistan signed the final agreement to launch construction of the pipeline in March 2010, signing an Operational Agreement and a Heads of Agreement, which included a provision for India’s possible participation in the project at a later date. Under the agreements, the now 900 km, 42 inch diameter pipeline would transport 750 MMcf/d of gas from Iran to Pakistan for the next 25 years in order to generate 4,000 MW of electricity, with a provision to increase deliveries to 1 Bcf/d.

By July 2010, local media sources reported that the first phase of the $US 3.2billion IP Pipeline had become operational, with Iranian President Mahmoud Ahmadinejad present at the inauguration ceremony. A month later, it was reported that Iranian firm Khatam Ol Anbia would be constructing the second phase of the pipeline.

According to ISGS, the project will reach completion in 2014. The conclusion of this long-awaited pipeline will bring much needed natural gas to Pakistan, easing its current large deficit in energy.