Pakistan and Qatar are actively pursuing the multi-million dollar direct gas pipeline project - the Gulf South Asia (Gusa) project - from Qatar to Pakistan following the completion of feasibility and engineering studies by Sharjah-based Crescent Petroleum, Usman Amin Uddin, Pakistan's Petroleum Minister, said yesterday.

The Gusa project has exclusivity for supplying Qatari gas via pipeline to Qatar.

Obeid bin Saif Al Nasiri, UAE's Minister for Petroleum and Mineral Resources, has assured the visting Pakistani minister that a delegation from the UAE will be sent to Pakistan soon to study investment opportunities in the energy sector there, he said.

"We are talking to Qatar on the proposed Gusa gas pipeline. Both the governments are supporting the project which is likely to be partly sub-sea and partly onshore. We are confident the project will make headway," the visiting minister told Gulf News.

Investment in the project will be met by a consortium from the private sector, he said.

Amin Uddin is meeting the Qatari oil minister and officials of Crescent Petroleum on his current tour.

The minister clarified that foreign investment into Pakistan has not stopped despite the tension in the region.

"Pakistan has attracted investment of $962 million since March 2000 in its upstream and downstream sector when it liberalised and modified its offshore and onshore investment policies. Protection of foreign investment programmes is strong in Pakistan."

Moreover, Abu Dhabi's investment in Pak-Arab Refining Co (Parco) has grown from $30 million to $886 million currently. "This is a true success of collaboration and we want to strenghthen and encourage investment by UAE in our privatisation process."

The $500 million oil pipeline set up by Parco's subsidiary from Karachi to interior Pakistan has progressed beyond expectations. The marketing of liquid gas is currently going on with TotalFinaElf undertaking the marketing.

Pakistan's oil import bill, currently around $3.5 billion, is expected to drop to $2.5 billion due to a drop in international oil prices, he said. "With several gas projects coming on stream by next year, oil imports will be down."

Pakistan's gas reserves are 282 trillion cubic feet (tcf) while only 39 tcf of gas has been discovered. Its oil reserves are some 27 billion barrels while only 700 million barrels have been discovered, he said, adding that resource constraints have impeded development of these sectors.

Demand for gas in Pakistan is growing at an annual rate of 5-6 per cent and current consumption of 2.5 billion cf/d is all met locally.