ISLAMABAD: Pakistan and Russia are advancing technical and commercial negotiations on the long-awaited Pakistan Stream Gas Pipeline project, estimated at around $3 billion.

Pakistani officials confirmed that discussions remain active with Russian counterparts to finalise key agreements for the infrastructure initiative.

The project involves construction of an approximately 1,100-kilometre onshore natural gas pipeline from the Karachi region northward to Kasur near Lahore. It aims to transport imported liquefied natural gas (LNG) from southern terminals to power plants, industries, and consumers in Punjab and other northern areas.

**Project ownership stands at 74 percent for Pakistani state entities and 26 percent for Russian partners.** This revised structure gives Pakistan majority control from the outset.

The pipeline is designed with an initial capacity of 12.4 billion cubic metres (bcm) of natural gas per year, with potential expansion to 16 bcm. Officials expect the project to take around 42 months to complete once construction begins.

Pakistani Ambassador to Russia Faisal Niaz Tirmizi recently stated that the initiative is “alive” and under active development. He noted ongoing negotiations as part of broader Pakistan-Russia economic cooperation, particularly in energy.

The project was first conceptualised in 2015 through an inter-governmental agreement. Delays occurred due to financing arrangements, ownership structures, and external factors. A revised agreement was signed in 2021, shifting majority stakes to Pakistan and adjusting implementation terms.

Russian companies are expected to supply specialised equipment, pipes, and technical expertise, while Pakistani firms will handle overall supervision through a special purpose vehicle.

Pakistan faces a persistent natural gas shortfall that affects power generation, fertiliser production, and domestic supply, especially during winter months. The pipeline is intended to help bridge this gap by ensuring reliable transport of imported LNG to high-demand regions.

Current estimates place the total investment requirement between $2 billion and $3.5 billion, depending on final technical specifications and material costs. The $3 billion figure cited in recent discussions reflects updated projections including inflation adjustments and expanded scope.

**Background** The Pakistan Stream Gas Pipeline, formerly known as the North-South Gas Pipeline, forms part of efforts to diversify energy import routes and reduce reliance on a single supply model. It will connect with existing LNG terminals at Port Qasim and potentially Gwadar in future phases.

Russia views the project as an opportunity to expand its footprint in South Asian energy markets and secure orders for its industrial and pipeline manufacturing sectors. Pakistani officials see it as a strategic addition to national energy security.

Progress on the project has been intermittent. Technical sessions between the two sides have focused on shareholder agreements, facilitation protocols, and financing models, including potential Russian bank loans for foreign currency components.

**Market and Regional Implications** Successful implementation could add significant capacity to Pakistan’s gas transmission network. It would support industrial growth in Punjab, which accounts for a large share of the country’s economic output, and help stabilise electricity supply by fuelling gas-based power plants.

Analysts note that the project aligns with Pakistan’s broader strategy to increase LNG imports while developing necessary infrastructure. It also fits into expanding Pakistan-Russia ties, which have included recent oil import deals and discussions on refinery cooperation.

Regional observers point to the pipeline’s potential role in enhancing energy connectivity, though full realisation depends on timely financing and execution. Some discussions have explored future integration with other proposed regional pipelines.

The initiative comes amid global energy market shifts and Pakistan’s efforts to secure affordable long-term supplies. Russian participation provides access to advanced pipeline technology and construction experience.

Further rounds of talks are expected in coming months to finalise remaining commercial details and move towards ground-breaking. Officials have indicated that a special purpose company will be established soon to oversee implementation.

Challenges remain, including final cost alignment, regulatory approvals, and securing international financing components. However, both sides have expressed commitment to advancing the project as a flagship of bilateral cooperation.

The pipeline’s completion would mark one of the largest joint infrastructure undertakings between Pakistan and Russia in recent decades and could open avenues for additional energy sector collaboration.

Future developments will depend on the pace of negotiations and ability to address remaining technical and financial aspects. Pakistani authorities continue to prioritise the project within national energy security planning.