ISLAMABAD-Pakistan and Russia have agreed to increase Islamabad’s share in the equity of North South Gas Pipeline (NSGP) (renamed to Pakistan Stream Gas Pipeline) to 76 percent while Moscow will fund 24 percent.

Similarly, it has also been agreed to rename the project from North South Gas Pipeline Project to Pakistan Stream Gas Pipeline (PSGP) Project. 

The final approval to the proposed amendments in the inter-governmental agreement (IGA) on North South Gas Pipeline (NSGP) will be given in the 8th session of Pakistan-Russia JCC on NSGP project in December, official source told The Nation. 

The Ministry of Energy (Petroleum Division) of Pakistan and Ministry of Energy of the Russian Federation held first Russia-Pakistan Technical Committee meeting from 16th to 18th November 2020 here on mutual cooperation for the development of North South Gas Pipeline Project. 

Both sides agreed to sign a protocol for amendment in the Inter-Governmental Agreement (IGA) earlier signed in 2015 between both the governments to reflect the revised implementation structure of the project after requisite approvals from respective governments. The parties agreed in principle to implement the project through a special purpose company to be incorporated in Pakistan by Pakistan and Russian parties, wherein Pakistan will have the majority shareholding.

Earlier, it was planned that the entire project will be executed with Russian funding, but after Supreme Court decision on the GIDC, the government of Pakistan has decided to provide maximum funding to the project. Now it has been decided that Pakistan’s share in the equity will increase to 76 percent while the Russian share will be 24 percent, said the source. Similarly, initially it was proposed that the pipeline of 1,100 kilometres was to be laid with a diameter of 42 inches with capacity to transport 1.2 billion cubic feet RLNG per day, however now Pakistan wants to increase of the pipeline to 1.6 bcfd with a diameter of either 52 inches or 56 inches. 

The Russian delegation comprised of representatives from Ministry of Energy of Russian Federation, Embassy of Russian Federation in Pakistan and other Russian companies and corporations. The Pakistani side included representation from Ministry of Energy (Petroleum Division) of Pakistan, Ministry of Foreign Affairs, and Law and Justice Division and Inter State Gas Systems (Private) Limited. The talks were also attended by Minister for Energy and Special Assistant to Prime Minister on Petroleum. 

The discussions were aimed at finalising the broad contours and parameters of the project involving construction of a high pressure gas transmission pipeline from Port Qasim, Karachi to Kasur (Punjab) for transportation of RLNG towards northern side of the country in order to fulfill the gas shortage emanating from growing gas demands of industrial and domestic consumers. The recent developments after the decision of the Supreme Court of Pakistan in the matter of GIDC and availability of GIDC funds for project development were a key consideration in the process. To better reflect the close bilateral ties and strengthened cooperation of Pakistan and Russian Federation for the development of project, the project has been renamed from “North South Gas Pipeline Project” to “Pakistan Stream Gas Pipeline (“PSGP”) Project”. Gas for the project will be sourced through existing and new LNG terminals at Port Qasim, Karachi. 

While giving the concluding remarks at session, Omar Ayub Khan, Federal Minister for Energy, lauded the Technical Committees from both sides for finalization of the Protocol to the Inter Governmental Agreement for the expeditious implementation of the North-South Gas Pipeline Project. He said that the Government of Pakistan envisages this as a first step towards the establishment of a strong bilateral relationship and strategic ties towards the Russian Federation. 

In his closing remarks, Nadeem Babar termed the North South Gas Pipeline ‘a stepping stone’ towards greater cooperation between Pakistan and Russia in the energy sector. The SAPM said that Pakistan is fully committed for an early realization of this key project and looks forward to working with the Russian Federation in an efficient manner. 

Both sides affirmed maximum utilisation of Russian and Pakistan materials, equipment and resources with an aim to enhance technical and operational capacity of Pakistani companies and human resource through mutual working and training.