The two countries originally signed the Intergovernmental Agreement (IGA) for the gas pipeline project in 2015
Pakistan will own 74% shareholding in the gas pipeline project. (Credit: bstad from Pixabay)
Russian and Pakistan signed an amended Intergovernmental Agreement (IGA) for the construction of the North South Gas pipeline project.
Pakistan’s Ambassador to Russian Federation Shafqat Ali Khan and Russian Minister for Energy Nikolay Shulginov have the agreement.
The two countries originally signed the IGA for the gas pipeline project in 2015. But, the project was delayed since then due to sanctions on Russian company Rostec by the US.
The North South Gas pipeline project is expected to improve the countries’ bilateral cooperation in the hydrocarbon sector.
Pakistan and Russia have also revised the terms of the deal, enabling the former to own 74% shareholding in the gas pipeline project, The Express Tribune reported.
The remaining stake of 26% will be owned by Russia.
The two countries will form a joint venture company to build the 1,100km gas pipeline project.
Shulginov was quoted by Sputnik as saying: “The signing will allow our companies to begin practical implementation of the project in the very near future, thereby helping the Pakistani side to strengthen its own energy security and increase the use of natural gas as an environmentally friendly source of energy.”
The pipeline will be built to connect liquefied natural gas (LNG) terminals in Karachi and Gwadar in south Pakistan to power stations and commercial customers in the Kasur district of the Punjab province in the north.
The deal reached by the two nations will also include setting up of Pakistan Stream Gas Pipeline Special Purpose Vehicle (SPV) within 60 days after the signing for the project implementation.