The Petroleum & Natural Resources Ministry is planning to build two 900- kilometre oil pipelines between Karachi and Multan in the Punjab province. International companies are expected to be invited to participate in the projects, which will cost approximately $1,250 million.
The two projects will comprise the following:
The estimated $500 million construction of a pipeline to carry light petroleum products, including kerosene and diesel. It will have a capacity of 9 million-10 million tonnes a year (t/y).
The estimated $750 million construction of a second pipeline to transport 8 million t/y of heavier oils.
Both pipelines will be laid in two stages. The first section will be laid from Karachi to Jamshoro in Sind province, and then extended northwards to Multan. The work is for completion by 1998.
One pipeline already connects Karachi to Multan and is used by Pak-Arab Refinery (Parco) to carry petroleum products to its northern customers. These lines could be used in the future to transport crude oil to the refinery which Parco proposes to build in Multan. Alternatively the first section could be used to supply fuel to the power station in Jamshoro.
The government is seeking to increase private-sector activity throughout the hydrocarbons industry. Incentives introduced in March include guaranteed returns for downstream ventures (MEED 8:4:94).