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November 19, 2020

Pakistan, Russia to amend maga gas project agreement

Business

November 19, 2020

ISLAMABAD: Pakistan and Russia on Wednesday concluded three-day technical level government-to-government talks and agreed to amend the agreement signed five year back to complete laying of about 1,200 kilometers long gas pipeline from Karachi to the northern region in the Punjab.

Both sides agreed to sign a protocol for amendment in the inter-governmental agreement earlier signed in 2015 between both the governments to reflect the revised implementation structure of the project after requisite approvals from respective governments, according to a joint statement.

In January 2015, the then government approved the north-south gas pipeline project to improve capacity of the existing gas infrastructure to transport an additional large volume of gas supplies from southern to northern regions of the country. At that, the project cost was estimated at $2.5 billion. They agreed in principle to implement the project through a special purpose company to be incorporated in Pakistan by Pakistan and Russian parties, wherein Pakistan will have the majority shareholding.

Russia and Pakistan ministries of energy discussed mutual cooperation for the development of north south gas pipeline project, renamed to Pakistan stream gas pipeline. The project is a flagship strategic venture between the institutions of Pakistan and Russia, which will strengthen the long term bilateral ties through people-to-people contact.

“The project will begin a new era of economic cooperation between Pakistan and Russian Federation,” said the statement. The discussions were aimed at finalising the broad contours and parameters of the project involving construction of a high pressure gas transmission pipeline from Port Qasim, Karachi to Kasur for transportation of re-gasified liquefied natural gas (RLNG) towards northern side of the country to fulfill the gas shortage emanating from growing gas demands of industrial and domestic consumers.

Gas for the project will be sourced through existing and new LNG terminals

The government is expected to start the project after the apex court directed businesses in August to pay off outstanding gas infrastructure development cess that is over Rs400 billion.

Pakistan and Russia are keenly interested to invest in the project and embark upon its timely, cost effective and successful implementation for the benefit of the people of Pakistan while ensuring optimum gas tariff. Both sides affirmed maximum utilization of Russian and Pakistan materials, equipment and resources with an aim to enhance technical and operational capacity of Pakistani companies and human resource through mutual working and training.