Pakistan, Russia sign gas pipe construction pact
Pakistan and Russia have signed an agreement that would allow work on the Pakistan Stream pipeline, earlier known as the North South Gas Pipeline, to begin, the Russian energy ministry said on May 28.
The agreement was signed by Pakistan’s ambassador to Russia Shafqat Ali Khan and Russian minister for energy Nikolay Shulginov in Moscow.
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“The relevant departments of our countries have done a lot of work on the preparation of this protocol. Its signing will allow our companies to begin practical implementation of the project in the very near future, thereby helping the Pakistani side to strengthen its own energy security and increase the use of natural gas as an environmentally friendly source of energy,” Shulginov said.
Islamabad and Moscow late last year signed a revised deal regarding the development of the project. The original inter-governmental deal was signed in 2015. Under the new agreement, Pakistan will hold a 74% stake in the project while Russia will have a 26% stake.
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 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.