Pakistan, Russia Amend Gas Pipe Deal
Pakistan and Russia have signed a revised deal regarding the development of the North South Gas Pipeline, the Pakistani government said on November 18. The original inter-governmental deal was signed in 2015.
The revised deal was signed by the ministry of energy (petroleum division) of Pakistan and the Russian energy ministry during the first Russia-Pakistan technical committee meeting that took place from November 16-18 in Islamabad. The parties also agreed to rename the project, Pakistan Stream Gas Pipeline.
Under the new agreement, Pakistan will hold 74% stake in the project while Russia will have a 26% stake, according to local media reports. Earlier, Russia was to construct the pipeline on the build, own, operate and transfer model and transfer its ownership to Pakistan after 25 years. Russia also needed to cover 85% of the required project expenditure whereas Pakistan only needed to provide 15%. Now, Pakistan will contribute 74% of costs, while Russia will cover 26%.
The countries also agreed in principle to implement the project through a special purpose company to be incorporated in Pakistan. The 1,100-km gas pipeline will link LNG terminals in the port of Karachi in the south of Pakistan with the city of Lahore in the north of the country.
“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,” the Pakistan government said.