Islamabad – Pakistan and Russian Federation have agreed to establish aspecial purpose company, namely Pakistan Stream Pipeline (Pvt.) Ltd for theexecution of North-South gas pipeline project, it is learnt reliably here.
The matters pertaining the new company and the start of execution work wasdiscussed on December 23, 2020, during the second meeting of the JointRussian-Pakistani Technical Committee for the implementation of theNorth-South gas pipeline project held in via video conference.
The Russian side of was headed by the Director of the Department ofInternational Cooperation of the Ministry of Energy of the RussianFederation A.N. Gospodariev and it also included representatives of theMinistry of Energy of the Russian Federation, the Federal State UnitaryEnterprise Center for Operational Services (FSUE TsEU) of the Ministry ofEnergy of Russia, OOO Eurasian Pipeline Consortium (OOO ETK) and PAO TMK.The Pakistani side was headed by the Director of the InternationalCooperation Department of the Ministry of Energy of the Islamic Republic ofPakistan, Saira Najib, and it also included representatives of the Ministryof Energy, the Ministry of Foreign Affairs and the NSGP Technical Committee
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The parties considered the draft JCC Regulations proposed by the Pakistaniside and agreed to exclude from clause 2. Functions and submit thefollowing sub-clauses to ISGS and the nominated Russian company forconsideration which includes Technical parameters and relatedissues;Shareholders Agreement between ISGS and the nominated Russiancompany;Memorandum and Articles of Association of a special purposecompany; Draft Implementation Plan; Sources of supplies of equipment andmaterial support.
The Russian side informed the Pakistani side about the consideration by therelevant federal executive bodies of the Russian Federation of the Protocolon Amendments to the Agreement between the Government of the RussianFederation and the Government of the Islamic Republic of Pakistan oncooperation in the implementation of the North-South gas pipeline projectdated October 16, 2015 and reported that will send an adjusted, but notfinal version of the specified document to the Pakistani side by January15, 2020.
The parties discussed the creation of a special purpose company, namelyPakistan Stream Pipeline (Pvt.) Ltd. The Pakistani side presented to theRussian side a presentation of the draft Shareholders Agreement, Memorandumand Articles of Association of the special purpose company.
The parties agreed that FSUE “TsEU”, LLC “ETK” and PJSC “TMK” willcomprehensively study the submitted projects of the Shareholders Agreement,Memorandum and Articles of Association of the special-purpose company andprepare comments, suggestions and additions to these documents.
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The parties agreed that FSUE “TsEU” On January 20, 2021, will send to theMinistry of Energy (Petroleum Division) the indicated list of materials tothe Shareholders Agreement, Memorandum and Articles of Association of thespecial purpose company. The Pakistani side noted the need for an earlyapproval of these documents in view of the need to start construction nolater than mid-2021. The parties agreed, prior to signing the ShareholdersAgreement, to create a separate working group to discuss and make jointdecisions on the technical parameters of the North-South gas pipelineconstruction project and hiring design contractors.
The Russian side proposed to take into account in the project the costsincurred by PJSC “TMK” related to the implementation of PreFEED. ThePakistani side expressed its readiness to discuss this issue and asked forthe results of PreFEED. It is worth to mention here that earlier it wasplanned that the entire project will be executed with Russian funding, butafter Supreme Court decision on the GIDC, the government of Pakistan hasdecided to provide maximum funding to the project.
Now it has been decided that Pakistan’s share in the equity will increaseto 76 per cent while the Russian share will be 24 percent, said the source.
Similarly, initially it was proposed that the pipeline of 1,100 kilometreswas to be laid with a diameter of 42 inches with capacity to transport 1.2billion cubic feet RLNG per day, however now Pakistan wants to increase ofthe pipeline to 1.6 bcfd with a diameter of either 52 inches or 56 inches.In November Pakistan and Russia had agreed to rename the project from NorthSouth Gas Pipeline Project to Pakistan Stream Gas Pipeline (PSGP) Project.
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