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 PM cancels trip to Russia over regional clashes
- The development comes as months of Pakistan-Afghanistan tensions have flared since last week
- Russian media reported that PM Shehbaz Sharif was due to travel to Russia from March 3 to 5
ISLAMABAD: Pakistan’s Prime Minister Shehbaz Sharif canceled on Sunday a trip to Russia in the coming days, citing the “regional and internal situation.”
Sharif was due to travel to Russia from March 3 to 5, it had been reported in Russian media.
Months of cross-border clashes between Pakistan and Afghanistan have flared since Thursday when Afghanistan launched an offensive along the frontier, with Pakistani forces hitting back on the border and from the skies.
And protesters took to the streets across Pakistan on Sunday after the death of neighboring Iran’s supreme leader Ali Khamenei in US-Israel air strikes.
“In view of the current regional and internal situation, the prime minister has decided to postpone his visit to Russia after consultations,” Sharif’s office said in a statement.
A new date will be decided after “mutual consultations,” the statement added.
