North-South gas pipeline: Pakistan, Russia finalise timelines for commercial, technical agreements today

ISLAMABAD: Pakistan and Russia are going to hold today (Tuesday) crucial talks here on much touted North-South gas pipeline of 1400 kilometers with resolve to carve out the strategy to complete commercial, technical and pipeline transmission tariff and BOOT agreements by April 15 prior to initiating the physical work on the pipeline.

The Russian delegation headed by Deputy Energy Minister Anatoli Tikhinov is visiting Pakistan for 7th JCC session on North–South pipeline, a senior official told The News. However, he said, Russia wants to complete discussions on technical and commercial aspects of the project by March 2020.

The proposed N-S pipeline will be laid down with diameter of 42 inch will have the capacity to evacuate 1.2 bcfd gas. The North-South pipeline with estimated cost of $2.1 billion has already delayed by 4 years and now the meeting between the two countries is too much important as this is going to be held after Russia has provided Pakistan a sanctions-free structure for the pipeline. Earlier the structures had some problems linked with sanctions and Pakistan didn’t give in into pressure from all the corners and kept insisting on providing a Russian Majority Owned, sanction free structure with pipeline building experience.

Pakistan was of the view that it could not afford to allow the Russian companies to be part of the project which are in list of sanctions or watch list as the country is under spanner of FATF. Since under new structure for pipeline given by Russia, none of the people are on such sanction list and not the companies as well so government of Pakistan will proceed after doing its full due diligence and only after approvals from competent authorities.

“Yes, Pakistan’s delegation headed by secretary petroleum division will hold meeting with Russian team and finalise the timelines of completing the various agreement by April 15 prior to starting the physical work on the said pipeline,” Adviser to Prime Minister on Petroleum Mr Nadeem Babar told The News. He said that this project will be completed under government-to-government arrangement. He said that Russia has erased Pakistan’s concerns by replacing the earlier companies which were in list of sanctions with a Joint Venture of LLC, Eurasian Pipeline Consortium and Federal State Unitary Enterprise (FSUE) which is Centre of Operations Services of the Ministry of Energy of The Russian Federation.

Pakistan earlier received a letter from Alexander Novak, Minister of Energy of The Russian Federation written on December 26, 2019 informing about the replacement of the earlier proposed project company now assigning of the project’s realisation rights to the project company ‘North South Gas Pipeline Private Limited, a Joint Venture of LLC, Eurasian Pipeline Consortium and Federal State Unitary Enterprise (FSUE) ‘Centre of Operations Services’ of the Ministry of Energy of The Russian Federation.

The official said that the letter from Novak is a major development for moving ahead towards realisation North-South Gas Pipeline Project and seems to have allayed the main concern of Pakistan stressing for the sanctions-free structure with pipeline building experience of the project implementation company, and now the earlier proposed structure has been become redundant, and there appears no need for seeking illegal opinion from the foreign law firm through Attorney General of Pakistan.

The existing gas infrastructure of Pakistan lacks capacity to transport additional large volume of gas supplies from Southern to Northern regions of the country. Therefore, keeping in view the expected additional gas supplies in near future, Ministry of Petroleum and Natural Resources has planned to undertake the laying of gas pipeline from Karachi to Lahore under the title “North-South Gas Pipeline Project”.

The ECC in its meeting held on January 10, 2015 approved the North-South Gas Pipeline Project under Government-to-Government arrangement.