ECC to approve funds for gas projects.

The Economic Coordination Committee (ECC) is set to approve a funding plan for gas import projects, mainly for laying a gas pipeline in collaboration with Russia for the transmission of imported gas.

The Supreme Court had earlier given directive for implementing a liquefied natural gas (LNG) pipeline project from Karachi to Lahore by utilising funds collected as gas infrastructure development cess (GIDC).

The Petroleum Division, in a summary sent to the ECC, sought approval for executing different gas pipeline projects, which included the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline as well.

The ECC, in its meeting held on February 10, 2020, approved that rationalised expenditures, as endorsed by the board of Inter State Gas Systems (ISGS), including the TAPI and North-South Gas Pipeline (NSGP) commitments, should be funded through GIDC funds.

Approval was granted for funding ISGS's operations by Government Holdings (Private) Limited (GHPL), conditional upon ISGS being financially self-sustaining after the first project reached the closure stage.

GIDC was primarily meant for projects being implemented by ISGS. However, no financing has been released to date for development activities related to TAPI, NSGP, Iran-Pakistan (IP) gas pipeline and Gwadar-Nawabshah Gas Pipeline (GNGP) projects except for the government's equity contribution to TAPI Pipeline Company Limited.

As a result of unavailability of GIDC funds, ISGS has been constrained to rely on financing from the parent company - GHPL - for project-related activities. This was intended as a stopgap arrangement for three years, during which ISGS was advised by the Petroleum Division to make optimal efforts for developing a revenue stream of its own.

The Supreme Court, in its judgement in the GIDC case dated August 13, 2020, directed the federal government shall take all steps to commence work on the laying of North-South pipeline within six months and on TAPI pipeline as soon as its laying in Afghanistan reached the storage where the work of laying pipeline on Pakistan's soil could conveniently start and on IP pipeline as soon as sanctions on Iran were no more an impediment in its laying.

In case, no work is carried out on the North-South pipeline within the prescribed time and for laying any of the two other major pipelines (TAPI and IP), though the political conditions become conducive, the purpose of levying cess shall be deemed to have been frustrated and the GIDC Act 2015...