Pakistan to Develop Strategic Underground Gas Storage Soon

Pakistan to Develop Strategic Underground Gas Storage Soon in 2022

Pakistan will invest Rs. One hundred twenty-seven billion in Strategic Underground Gas Storage (SUGS). In this regard, the bankable feasibility study will be completed by June 2022.

An official source told ProPakistani that the bankable feasibility study for the construction of Strategic Underground gas storage would cost around Rs. 1.848 billion and will aim to develop a framework for constructing strategic natural gas storage.

According to the official, the consultant is preparing a bankable feasibility study by undertaking additional 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.

According to the source, the cost of the bankable feasibility study includes a rupee component of Rs. Two hundred fifty million and a foreign exchange component of Rs. 1,598 million.

Underground storage would be a critical component of an integrated and continuous gas supply scheme. Due to depleting natural gas reserves, Pakistan’s reliance on imported LNG is growing by the day. Still, in the absence of storage capacity, the country cannot afford even a minor disruption in imported gas supply. As a result, an investment of approximately Rs. One hundred twenty-seven billion is planned to develop local Strategic Underground Gas Storage, according to the official.

When asked about the funding source for the massive investment, the official stated that funds would be managed through the Gas Infrastructure Development Cess, PSDP, and G2G arrangement.

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