$2 bn RLNG pipeline: Crucial Pak-Russia talks begin today

ISLAMABAD: Pakistan and Russia are going to initiate crucial talks here on Monday (today) to give final touches to a BOOT (built own operate and transfer) based agreement for laying down $2 billion 800km North-South RLNG specific pipeline staring from Nawabshah to Lahore, a top senior official of Petroleum Division told The News.

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“Once the project gets completed, the Russian company is most likely to charge 70-75 cents per mmcfd gas as transportation tariff.”

Pakistan’s two LNG terminals are currently equipped with the off-take guarantee of 1.2 bcfd re-gasified LNG from the government of Pakistan. However, three private-to-private model based LNG terminals are also in pipeline, which may be operational by 2020.

And on top of that, (Turkmenistan-Afghanistan-Pakistan –India) TAPI line is also re-scheduled to be operational by 2020.

Under this project, Pakistan will be importing 1.3 bcfd gas.

The main problem will be how to evacuate the gas to various parts of the country and for this purpose both Pakistan and Russia will give the final shape to the BOOT agreement.

The N-S pipeline with diameter of 42 inch will be having the capacity to evacuate 1.2 bcfd gas. Pakistan Inter-State Gas System (ISGS) and from Russia’s side RT Global will engage in talks. Both sides have done maximum work in the last two years towards the agreement. But the main problem that hindered its execution is the US sanctions on the Russian company.

ROSTEC, the mother company of the RT Global, is facing sanctions on account of Ukraine issue.

In the parleys to be started from today (Monday) RT Global will also come up with a sanctions-free structure to get the gas pipeline deal done.

Managing Director Inter State Gas System Mobin Saulat confirmed the development saying time both the sides will give final touches to the agreement. He expressed the hope that the Russian side will present a sanctions-free structure.

The talks will complete in three to four days. The project cost will stand at $2 billion and the Russian company will hand the project over to Pakistan after 25 years, as it will be executed under BOOT arrangement.

To a question, Saulat said if need be a 300km pipeline will also be completed from Karachi to Nawabshah under N-S project but the 300km part of the project will be initiated later on.

He said the Ministry of Defense had been asked to provide the RoW (right of way) for the pipeline project and hoped that the NOC to this effect will soon be in possession.

He said the front end engineering design (FEED) for the project and the survey had already been completed.