Pakistan to Develop Strategic Underground Gas Storage Soon
Pakistan will develop a Strategic Underground Gas Storage (SUGS) costing Rs. 127 billion. The bankable feasibility study in this regard will be completed by June 2022.
The bankable feasibility study for the construction of Strategic Underground gas storage will cost around Rs. 1.848 billion, and its objective is to develop a framework for the construction of strategic storage of natural gas.
Under the study, the consultant is formulating a bankable feasibility study by undertaking further work and studies related to detailed engineering design and ESIA-II transaction advisor to plan and structure the commercial and financial anatomy related contractual framework and financing of the project, the official said.
The cost of the bankable feasibility study includes the rupee component of Rs. 250 million and the Foreign Exchange Component of Rs. 1,598 million said the source.
The construction of underground storage would be an essential element of an integrated and uninterrupted gas supply scheme. Due to depleting natural gas reserves, Pakistan’s reliance on imported LNG is increasing day by day, but in the absence of storage capacity, the country cannot afford a small interruption in the supply of imported gas. Therefore, it is being planned to develop local Strategic Underground Gas Storage with an investment of approximately Rs. 127 billion, the official said.
When asked about the source of financing for the huge investment, the official said that funds will be managed through Gas Infrastructure Development Cess, PSDP, and G2G arrangement.