Thursday, March 17, 2022
ISLAMABAD: Pakistan and Russia have broadly agreed to establish the North-South Gas Pipeline Project at an estimated cost of approximately $3 billion, Federal Minister for Finance and Revenues Shaukat Tarin said Wednesday.
In the wake of an ongoing war between Russia and Ukraine, Pakistan will have to move forward carefully, The News reported.
Per the report, the pipeline project has become important for Pakistan to move towards the finalisation of this important deal, mainly because the country could not meet its pressing energy requirements without placing this much-awaited desired infrastructure.
Both sides had already signed the Inter-Governmental Agreement for the construction of the North-South Gas Pipeline of 1,122 kilometers from Karachi to Kasur as it will increase the capacity of the country to transport imported gas from port to the central part of Punjab.
“Yes, we have broadly agreed for establishing this multi-billion gas pipeline project with Russia and now future virtual talks were expected to finalise the shareholders' agreement and execution of this project,” Tarin said when The News inquired from him about the finalisation of North-South Gas Pipeline Project.
He said that the cost of this project was estimated at around $3 billion but it would be firmed up after the conclusion of upcoming virtual parleys between the two sides.
Another federal minister also confirmed to The News that the gas pipeline project was almost finalised with an estimated cost of over $2.5 billion.
When inquired why the cost of the project had escalated and went up to $3 billion, he said that the prices of steel and other products in the international market had gone up, so the cost of the project would also be increased.
The inter-government agreement between Pakistan and Russia has been updated as a protocol to reflect the utilisation of Gas Infrastructure Development Cess and continued partnership with Russia to construct this project.
Under the amended agreement, the North-South Gas Pipeline has been renamed as Pakistan Stream Gas Pipeline and to this effect, a PSGP Special Purpose Vehicle will be set up after signing of the protocol to implement the project.
It was the second time the IGA was signed as the North-South Gas Pipeline was earlier signed between both countries in 2015 but was never implemented.
Pakistan needs a gas pipeline to transport LNG from South to North. The government wants to increase the scope of capacity and design of the project to transport 1.6 billion cubic feet of gas per day (bcfd) as earlier it was proposed with the capacity to transport 1.2bcfd.