ISLAMABAD: Pakistan and Russia are set tomorrow, Friday, to formally sign an amended Inter-Governmental Agreement (IGA) for a flagship pipeline due to be built by Russia and stretching 1,100 km (680 miles) from Pakistan’s Punjab province to the port city of Karachi.
The project, earlier called the North-South Pipeline but recently renamed the Pakistan Stream Gas Pipeline Project, will deliver gas from Pakistan’s coastal regions to industrial areas in the north and will boost the country’s capacity to internally transport imported gas (LNG). It has been held up since 2015 due to a disagreement over fees and United States sanctions against Russian state conglomerate Rostec.
Last November, Russian officials visited Pakistan for three-day-long negotiations to finalize work on the project, the biggest infrastructure deal with Russia since the early 1970s when the Soviet Union set up the Pakistan Steel Mills industrial complex at Port Qasim, near Karachi. The project was also a main topic of discussion during Russian foreign minister Sergey Lavrov’s two-day trip to Islamabad last month.
“Soon after the formal signing [on Friday], the pipeline project will be renamed as Pakistan Stream Gas Pipeline (PGSP),” Pakistan’s The News newspaper reported. “The cost of the project has been estimated at $2.25 billion by Pakistani officials, which is not yet finalized by the Russian side.”
Under the revised agreement, Pakistan will own 74 percent stakes in the pipeline and Russia 26 percent. Pakistan’s Ambassador to Russia, Shafqat Ali Khan, will sign the protocol on the amendments to the agreement on behalf of Pakistan in Moscow on Friday.
“Once the amended agreement is signed, both sides will have to sign within 60 days the shareholding agreement, heads of agreement under various commercial arrangements and a Special Purpose Vehicle (SPV) company will also be constituted that will materialize the project,” The News said.
Indigenous natural gas contributes around 38 percent to Pakistan’s total primary energy supply mix. Pakistan produces around 4 billion cubic feet per day against an unconstrained demand of 6 bcfd and imports gas to meet the deficit, particularly when demand peaks in winters.
Pakistan has become an emerging buyer in the international LNG market over the last few years, with an increasing gap between demand and supply of gas.
The power sector is Pakistan’s largest natural gas consumer, followed by residential consumption and the fertilizer industry.
Pakistan, Russia to formally sign amended agreement on flagship gas pipeline tomorrow
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Pakistan, Russia to formally sign amended agreement on flagship gas pipeline tomorrow
- Project will stretch 1,100 km from Pakistan’s Punjab province to Karachi, will increase country’s capacity to internally transport LNG
- Project held up since 2015 due to disagreement over fees and US sanctions against Russian state conglomerate Rostec
Pakistan’s OGDC ramps up unconventional gas plans
- Pakistan has long been viewed as having potential in tight and shale gas but commercial output has yet to be proved
- OGDC says has tripled tight-gas study area to 4,500 square km after new seismic, reservoir analysis indicates potential
ISLAMABAD: Pakistan’s state-run Oil & Gas Development Company is planning a major expansion of unconventional gas developments from early next year, aiming to boost production and reduce reliance on imported liquefied natural gas.
Pakistan has long been viewed as having potential in both tight and shale gas, which are trapped in rock and can only be released with specialized drilling, but commercial output has yet to be proved.
Managing Director Ahmed Lak told Reuters that OGDC had tripled its tight-gas study area to 4,500 square kilometers (1,737 square miles) after new seismic and reservoir analysis indicated larger potential. Phase two of a technical evaluation will finish by end-January, followed by full development plans.
The renewed push comes after US President Donald Trump said Pakistan held “massive” oil reserves in July, a statement analysts said lacked credible geological evidence, but which prompted Islamabad to underscore that it is pursuing its own efforts to unlock unconventional resources.
“We started with 85 wells, but the footprint has expanded massively,” Lak said, adding that OGDC’s next five-year plan would look “drastically different.”
Early results point to a “significant” resource across parts of Sindh and Balochistan, where multiple reservoirs show tight-gas characteristics, he said.
SHALE PILOT RAMPS UP
OGDC is also fast-tracking its shale program, shifting from a single test well to a five- to six-well plan in 2026–27, with expected flows of 3–4 million standard cubic feet per day (mmcfd) per well.
If successful, the development could scale to hundreds or even more than 1,000 wells, Lak said.
He said shale alone could eventually add 600 mmcfd to 1 billion standard cubic feet per day of incremental supply, though partners would be needed if the pilot proves viable.
The company is open to partners “on a reciprocal basis,” potentially exchanging acreage abroad for participation in Pakistan, he said.
A 2015 US Energy Information Administration study estimated Pakistan had 9.1 billion barrels of technically recoverable shale oil, the largest such resource outside China and the United States.
A 2022 assessment found parts of the Indus Basin geologically comparable to North American shale plays, though analysts say commercial viability still hinges on better geomechanical data, expanded fracking capacity and water availability.
OGDC plans to begin drilling a deep-water offshore well in the Indus Basin, known as the Deepal prospect, in the fourth quarter of 2026, Lak said. In October, Turkiye’s TPAO with PPL and its consortium partners, including OGDC, were awarded a block for offshore exploration.
A combination of weak gas demand, rising solar uptake and a rigid LNG import schedule has created a surplus of gas that forced OGDC to curb output and pushed Pakistan to divert cargoes from Italy’s ENI and seek revised terms with Qatar.
