ISLAMABAD: Pakistan and Russia are set to sign a $10-billion offshore gaspipeline deal.
The cabinet had approved the signing of the gas pipeline laying deal andPakistan ambassador to Russia had been authorised to ink a memorandum ofunderstanding with Moscow.
The envoy is likely to ink the understanding in Moscow on Monday. Finalcost of the project will be assessed following a feasibility study to beconducted by Russian energy giant Gazprom.
Russia has nominated Public Joint Stock Company Gazprom for implementationof the project. Pakistan’s cabinet has also permitted the company toconduct the feasibility study at its own cost and risk.
Inter State Gas Systems (ISGS) – a state-owned company of Pakistanestablished to handle gas import projects and is already working on gaspipeline schemes like Tapi, has been nominated by Pakistan to execute theoffshore pipeline project along with Gazprom.
ISGS is also working on the $10-billion Turkmenistan, Afghanistan, Pakistanand India (Tapi) gas pipeline to connect South and Central Asia andconstruction work on the scheme in Pakistan will start in March next year.
These projects are called a game changer for Pakistan as they will not onlylead to regional connectivity, but will also meet growing energy needs ofthe country.
Amid a long-running tussle with Europe and the United States over theannexation of Ukrainian region of Crimea, Russia is looking for alternativemarkets and wants to capitalise on the growing energy demand in South Asia.
Russia, which controls and manages huge gas reserves in energy-rich Iran,plans to export gas by laying an offshore pipeline through Gwadar Port toPakistan and India, which are seen as alternative markets because Moscowfears it may lose energy consumers in Europe over the Crimea stand-off.
Russia has been a big gas exporter to European Union (EU) countries andTurkey since long and despite US anger the European bloc has continued tomake imports to meet its energy needs.
Moscow receives gas from Turkmenistan and then exports it to EU states.Later, it has got gas deposits in Iran as well and is looking to gain afoothold in markets of Pakistan and India.
Pakistan has been experiencing gas shortages, particularly in winter, forthe past many years as domestic production has stood static with newadditions being offset by depleting old deposits.