Pakistan and Russia likely to sign billions of dollars development project

Pakistan and Russia likely to sign billions of dollars development project

ISLAMABAD: Pakistan and Russia are likely to sign a commercial agreement within 30 days for the construction of the 1,100-kilometre North-South Gas Pipeline (NSGP).

The government has planned on taking action regarding the NSGP project to ensure transport of 1.2 billion cubic feet per day (BCFD) of Regasified Liquefied Natural Gas (RLNG) from Karachi to Lahore.

Sources said that the Petroleum Division has decided to finalise the NSGP project with Russia and work on the project will commence in six months. They also said that the government is also finalising a commercial agreement with Russia within 30 days, Pakistan Today has reported.

They said that the Petroleum Division created a joint venture with Russia wherein it retains 51-80 per cent equity. It will fund a large portion of the debt from the Gas Infrastructure Development Cess (GIDC) funds, and start land acquisition right away. A decisive meeting between Pakistan and officials from Russia is likely to be held during September to decide the fate of NSGP project, they added.

Sources said that following a decision of the Supreme Court (SC) regarding the Gas Infrastructure Development Surcharge (GIDS), the Petroleum Division has been considering various options to ensure the construction of NSGP as the GIDC amount can only be spent in gas infrastructure projects. If the government fails to initiate any gas infrastructure project during the next six months, then the GIDS Act will be invalidated as per the apex court’s order on GIDC, they added.

It has been learnt that the Petroleum Division has sought advice from the Law Division regarding the GIDC, including time constraints, expandability, and consumer billing and refund policies.

An agreement between Pakistan and Russia was previously signed on October 16, 2015, for the development of the NSGP having a transmission capacity of 1.2 BCFD from Karachi to Lahore.

According to the document, Pakistan and Russia had entered into government-to-government (G2G) agreement for the development of the NSGP project. The proposed pipeline will be laid with a 42-inch diameter and will have the capacity to transport 1.2 BFCD of RLNG.