ISLAMABAD: The Oil and Gas Regulatory Authority (OGRA) has invited public and expert opinion on a proposed four-year payback period for a $432 million government-to-government oil pipeline project between Pakistan and Azerbaijan. A public hearing has been scheduled for March 2 to discuss whether the proposed payback period is justified and if the project may affect regional transportation costs compared to current road-based movement.
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The pipeline, planned in three sections, includes a 20-inch, 256-kilometre line from Faisalabad to Thallian with a 7 million tonnes per annum (MTPA) capacity, extendable to 10 MTPA; a 12-inch, 172-kilometre section from Thallian to Tarujabba with five MTPA capacity; and an eight-inch, 9km link from Thallian to Faqirabad. Storage capacities are planned at 60,000 tonnes at Faisalabad and Thallian, and 50,000 tonnes at Tarujabba. The total project life is projected at 30 years.
OGRA has called for expert and public feedback on a proposed $432M Pakistan–Azerbaijan oil sector investment, questioning whether the fast four-year payback period is realistic. Public hearing set for March 2. #OGRA #Energy https://t.co/WldM3s9iJ8
— Asim Minhas (@asim_minhas007) February 23, 2026
The project, to be implemented by organization SOCER, and Pakistan State Oil through a joint venture, is being promoted as a strategic investment. Approximately 70 percent of petrol and diesel in Pakistan is currently transported by road, 28 percent via the Karachi-Machike pipeline, and 2 percent by rail.
While the Economic Coordination Committee approved the $300 million project five months ago, the Ministry of Finance and Power Ministry raised concerns over the rapid four-year dollarized payback, potential tariffs, and the financial viability of guaranteed returns. The ECC emphasized the strategic value of the project, overruling suggestions to extend the payback period to seven years.
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OGRA has also requested public input on throughput volumes, pipeline capacity, and tariff mechanisms under a “default mode of transportation,” where oil marketing companies commit minimum annual volumes, with shortfalls adjusted against inland freight equalization margins. The regulatory authority will design a framework to ensure optimal pipeline utilization while balancing investor and consumer interests.