The government has signed an implementation agreement with the Indus Pipeline Company (IPC) for the construction of a fuel oil pipeline from Port Qasim to Jamshoro on a build-own-operate (BOO) basis. IPC is a joint venture company established to implement the project by the Athens-based Consolidated Contractors International Company (CCC) and Pakistan State Oil (PSO). IPC’s other shareholders are Kanamatsu Corporation and Nittetosu Shoji Company, both of Japan. Project sources say that other foreign investors may be involved in the project but details have yet to be finalised.
The pipeline will be 145-160 kilometres long and will cost about $125 million. It will have a capacity of 3 million-4 million tonnes a year of fuel oil. The majority of the fuel oil will be used by the Jamshoro power station, with the remainder to be distributed to other local consumers. The power station is currently supplied by road and rail and the new pipeline will ease severe traffic congestion in Karachi. The sale of a 26 per cent stake with management control in the power station, due to take place this year, will not affect the project, sources say, as the power plant will continue to be supplied by PSO.
Financing of the project will include a debt portion of 70-75 per cent of total financing requirements. CCC says that it hopes to finalise all agreements concerning the project, including the financing package by the end of the year. The construction period is expected to be 18 months.