ISLAMABAD - Pakistan and Russia Wednesday signed Inter Corporate Agreement to conduct feasibility study of $10 billion offshore gas pipeline project.

Under the agreement, Russian state run company Gazprom will conduct a feasibility study to build offshore pipeline from Iran to Pakistan. The Inter Corporate Agreement was signed here by Managing Director Inter State Gas Systems, Mobin Saulat, and Vitaly A Markelov of Gazprom on the behalf of their respective companies.

A Russian delegation, headed by Vitaly A Markelov, deputy chairman of the Management Committee, PJSC, ‘Gazprom’ International, visited Petroleum Division.

It is pertinent to mention here that earlier it was planned that the agreement should be signed in the presence of Prime Minister Imran Khan and requested the ministry of foreign ministry for the same. However the proposal was rejected by the ministry of foreign affairs. In a communication with the Petroleum Division, the ministry of foreign affairs said: “The ministry doesn’t support signing of the MoU, either in the presence of the honorable Prime Minister of Pakistan or at the Prime Minister Office as the same is a commercial agreement between two commercial entities.”

Later the signing ceremony was held in the ministry of Energy (Petroleum Division). Under the Inter Corporate Agreement, it was agreed that Russia will export 500 million cubic feet per day (MMCFD) to 1 billion cubic feet per day gas to Pakistan. The pipeline construction is expected to be completed in three to four years. Russia imports gas from Turkmenistan and then exports it to European states. Besides Russia holds huge gas deposits in Iran and has offered Pakistan and India gas exports by laying an offshore pipeline that will pass through Gwadar Port.

In the first instance, a feasibility study would be conducted by Gazprom at its own cost with no financial implications on Pakistan. Certain economic benefits such as transit fee would accrue to Pakistan if the project is implemented.

Federal Minister for Petroleum Division, Ghulam Sarwar Khan on the occasion appreciated the expanding trajectory of bilateral relations between Russia and Pakistan.

He welcomed Gazprom’s interest in off-shore gas pipeline project and termed it a manifestation of multifaceted cooperation between both countries. This project envisages transporting of gas molecules from Gazprom’s sources in the Middle East onwards to Pakistan with a possibility in extending it further to South Asian countries.

The pipeline would follow an integrated approach including other ancillary projects such as Under Ground Gas storage, desalination and other power projects. Pakistan will import some 500 million to 1 billion cubic foot of gas from Russia daily, which would be transported via sea link, the agreement stipulates.

The Russian side thanked their Pakistani counterparts for the facilitation being extended in preparing necessary groundwork for the project and renewed their commitment to deepening energy cooperation between both sectors.

The Russian side invited the Federal Minister to visit Russia at mutually convenient dates, which the minister gladly accepted.