Pak, Russia pipeline deal


IN what could be called an important development in the en
ergy sector, Pakistan and Russia agreed to amend an inter-governmental agreement in a bid to executing a two billion dollar gas pipeline project by avoiding US sanctions. Initially the two sides had signed a deal in October 2015 to construct the North South liquefied natural gas (LNG) pipeline, however the project could not go ahead over the past few years as the US had slapped sanctions on RT Global- the company designated by Russia for building the pipeline. Since the relations between Pakistan and Russia are on upward trajectory, it is a matter of satisfaction that the Russian side agreed to provide sanction-free structure for the realization of the strategically important project.
We expect that other matters including those related to price deal and tolling fee for gas transmission will also be sorted out at the earliest so that the construction work on the project could be started at the earliest without any further delay. The existing gas infrastructure of Pakistan lacks capacity to transport additional large volume of gas supplies from Southern to Northern regions. Keeping in view the expected additional gas supplies in near future, this gas pipeline from Karachi to Lahore is of immense importance to ensure gas supply in the country. The 1,100 kilometre pipeline with a capacity of 12.4 billion cubic metre per annum will connect Karachi’s liquefied natural gas (LNG) terminals with those in Lahore. In fact this project is a win-win deal for both the sides as the construction of the pipeline will provide orders for Russian industrial enterprises and will contribute to an increase in non-oil exports. The project will open up a new market for Russian companies. We are confident that the completion of this important project will prove to be a milestone in furthering the relations between the two countries. We need to further encourage the Russian friends to invest in the energy sector of Pakistan, especially in the exploration of oil and gas, to ensure energy security.

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