KARACHI: Pakistan and Russia on Thursday signed a memorandum of understanding (MoU) in Moscow for the construction of the marine gas pipeline, the Russian Ministry of Energy confirmed to Arab News.
“Deputy Minister of Energy of the Russian Federation Anatoly Yanovsky and Deputy Minister of Energy of Pakistan Sher Afgan-Khan signed a Memorandum of Understanding between the Ministry of Energy of the Russian Federation and the Ministry of Energy of the Islamic Republic of Pakistan on cooperation in implementing the offshore pipeline project,” the ministry said in a statement issued after the signing of the agreement.
According to the agreement the gas from fields in Iran will be supplied to consumers in Pakistan and India. “I think this will create additional conditions for the signing of the same document with the Indian side,” said Yanovsky.
“The Memorandum provides for the identification of authorized organizations through which the project will be supported, including when developing a feasibility study — identifying the resource base, configuration and route of the gas pipeline,” the statement added.
The deputy minister noted that the interaction between Russia and Pakistan in the fuel and energy sector is not limited to the offshore pipeline project: in particular, consultations are being held on the North-South gas pipeline project.
According to Anatoly Yanovsky, the project of LNG supplies to the Pakistan can become a promising direction of cooperation. An intergovernmental agreement on the supply of oil products from Russia to Pakistan is also under consideration. In addition, the Russian electric power industry has also shown interest in the Pakistani market.
Pakistan and Russia have signed the agreement at a time when the United States of America is mounting pressure on the countries to not deal with Iran. “It is a bold call which shows that Pakistan is not going to bow to the US threats,” said Muzamil Aslam, senior economist, adding: “This could have repercussions as the US may pressurize Pakistan through other countries and may induce its investors withdraw their investment from Pakistan stock market.”
The underwater pipeline is expected to be completed within three to four years of the signing of the agreement. The pipeline could supply from 500 million cubic feet to 1 billion cubic feet of natural gas per day.
A feasibility study of the project will be conducted by Russian energy giant Gazprom. The project will be jointly handled by Pakistan’s state-owned Inter State Gas Systems (ISGS) and Gazprom.
The ISGS is currently engaged on mega gas pipeline schemes such as the $10 billion Turkmenistan – Afghanistan – Pakistan – India (TAPI) gas pipeline project, which aims to bring natural gas from the Gylkynish and adjacent gas fields in Turkmenistan to Afghanistan, Pakistan and India.
The Asian Development Bank is acting as the facilitator and coordinator for the TAPI project. The feasibility study, proposed to lay a 56-inch diameter 1,000-mile pipeline with design capacity of 3.2 billion cubic feet of natural gas per annum (Bcfd) [IS THIS PER DAY OR PER ANNUM] from Turkmenistan through Afghanistan and Pakistan up to the Indian border. The project is scheduled to commence operations in 2020.
The increased supply of gas to Pakistan will have positive impact on the economy of the country, said Muzamil Aslam commented. “Pakistan’s energy needs would be met and our industries, particularly export industry, will benefit to large extent and employment opportunities would also increase.”