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Pakistan and Russia inks revised gas deal

Pakistan and Russia inks revised gas deal

Islamabad, November 20 - Neftegaz.RU.  Pakistan and Russian have signed a revised deal for a major bilateral gas pipeline project with Islamabad getting more shareholding in it. Under the revised deal, the project’s name has been changed to Pakistan Stream Gas Pipeline from formerly known as the North South Gas Pipeline.

Both sides also agreed to run the project through a special purpose company, which would be incorporated in Pakistan.  Earlier, Russia had to construct the gas pipeline on the build, own, operate and transfer (BOOT) model under which the ownership of the project was to transfer to Pakistan after 25 years.

After the revised deal, Pakistan would contribute 74% of the total capital by utilising gas infrastructure development cess (GIDC) and Russian will spent 26%.

Though Russia has minority shareholding, Pakistan will ensure utilisation of Russian material, equipment and resources. The move aims at boosting technical and operational capacity of Pakistani companies and human resources through mutual working and training.

A Russian technical delegation arrived in Pakistan on November 16 on 3-day visit to discuss the formerly known as NSGPP.

The revised deal happens after a Supreme Court of Pakistan’s ruling in the matter of GIDC and availability of GIDC funds for project development.

In October 2015, Pakistan and Russia signed an agreement to build a gas pipeline from the Pakistani city of Karachi to Lahore. The initiative went through many ups and downs and is 5 years behind schedule, although Russia remained committed to its execution, the source said.

The gas pipeline project has been revised upwards by changing its route and diameter. Pipeline on the new route between Karachi and Lahore will be around 1,700 km long. Its transmission capacity was also enhanced from one to 1.6 billion cubic feet (bcf).

The current capacity for gas supply will be 2 bcf, which can increase up to 3 bcf in the next 10 years.