Ogra invites comments on four-year payback, dollar-based returns, and transport cost implications of Pak-Azerbaijan pipeline project
ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) has called for public and expert feedback on a proposed four-year payback period for a $432 million oil pipeline project jointly developed by Pakistan and Azerbaijan. The public hearing is scheduled for March 2, with stakeholders invited to comment on whether the rapid payback and dollar-based returns are justified and how the project could affect regional transport costs.
The project involves a 256-kilometre, 20-inch pipeline from Faisalabad to Thallian near Islamabad, a 172-kilometre, 12-inch line to Tarujabba near Peshawar, and a short eight-inch segment from Thallian to Faqirabad. It is expected to carry seven million tons of petroleum products annually, extendable to 10 MTPA, with storage capacities of 50,000–60,000 tons at key stations.
While the Economic Coordination Committee (ECC) cleared the project at $300 million in September 2025, the Ministry of Finance has raised objections to dollar-based returns on local investment and the short payback period. The project will be developed with Azerbaijan’s SOCAR, the Frontier Works Organization (FWO), and Pakistan State Oil, aiming to strengthen bilateral trade and strategic ties.
Ogra seeks input on projected throughput, pipeline capacities, and storage adequacy. The regulator will design a tariff framework in US dollars, ensuring optimal use of the pipeline as the “default mode of transportation,” with guaranteed minimum volumes from oil marketing companies.
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