Fed up with oil tanker owners’ frequent threat of strike to press their demands, Pakistan’s Economic Coordination Committee (ECC) is likely to allow Inter State Gas Systems (ISGS) to float a tender and invite companies to build an oil pipeline from Machike (Sheikhupura) to Tarru Jabba (Peshawar).
Beside, deadly tanker accidents too have been a matter of grave with authorities.
Tanker owners and drivers are also alleged to be involved in oil theft at different depots of Pakistan State Oil and power plants.
To put an end to tanker owners’ blackmailing tactics and curb their malpractices, Petroleum Division is planning to build an oil pipeline and wants to give the task to ISGS a state-owned company – to elicit investors’ interest in the project.
ISGS has been dealing with gas pipeline projects like Iran-Pakistan, Turkmenistan-Afghanistan-Pakistan-India (Tapi) and North-South gas pipelines.
According to experts, oil pipelines are a safer mode of transportation as an estimated $200 million worth of furnace oil is stolen every year during transportation by tankers.
Th Division has sent a summary to the ministries concerned to seek their comments before tabling it in an ECC huddle for approval.
Tariff for the pipeline will be determined through competitive bidding. The project will be executed in three phases based on the build-operate-transfer model with concession period spanning over 15 years.
Earlier, Pak-Arab Refinery (Parco) a joint venture between Pakistan and Abu Dhabi was offered to lay the oil pipeline, but it refused the offer, arguing the project was not financially viable owing to expected low volumes.
At present, domestic refineries produce 13 million tonnes of petroleum products per annum against the demand for over 24 million tonnes. The balance is imported by PSO and private sector OMCs. Demand for petrol is growing at a pace of 20% and diesel at 10% per annum in the country.
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