MOSCOW: Pakistan and Russia have signed an inter-governmental agreement for the construction of 1,100-kilometer (684-mile) gas pipeline, stretching from southern Pakistan’s Karachi to Lahore in the country’s northeast.
Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi and Russian Energy Minister Alexander Novak signed the agreement in Islamabad.
Prime Minister Nawaz Sharif also attended the signing ceremony.
The $2 billion project, to be built by Russian state-owned industrial conglomerate Rostec, with a capacity of 12.4bcm per annum will connect liquefied natural gas terminals from the port city of Karachi to Lahore, helping the country deal with crippling energy shortages.
Rostec, run by a close friend of Russian President Vladimir Putin, would finance, own and operate the pipeline for 25 years.
Rostec’s partner in the project will be Inter State Gas Systems (ISGS) controlled by Pakistan. The Pakistani side undertakes to grant the rights to use land plots necessary for the project implementation and carry out research route laying works.
The first phase of the project will be completed by December 2017.
Moreover, Russia is also interested in supporting the Iran-Pakistan (IP) pipeline through energy giant Gazprom.
The $7.5-billion IP pipeline was inaugurated with great fanfare in March 2013 — but the project immediately hit quicksand in the form of international sanctions on Tehran, which meant cash-strapped Pakistan struggled to raise the money to build its side.
Tehran has already built its part of the 1,800-kilometre (1,100-mile) pipeline which should eventually link its South Pars gasfields to the Pakistani city of Nawabshah, close to the economic capital Karachi.
Pakistan s key ally China is currently financing the construction of a gas pipeline from the southern town of Nawabshah to the deepwater port of Gwadar, not far from Iran.
Once that is built, Pakistan will “only have to build another 80 kilometres” of pipeline to link up to Iran, and could eventually extend the project as far as its northern border with China.
