Pakistan, Russia to establish North-South gas pipeline project

Islamabad – Pakistan and Russian Federation have agreed to establish a special purpose company, namely Pakistan Stream Pipeline (Pvt.) Ltd for the execution of North-South gas pipeline project, it is learnt reliably here.

The matters pertaining the new company and the start of execution work was discussed on December 23, 2020, during the second meeting of the Joint Russian-Pakistani Technical Committee for the implementation of the North-South gas pipeline project held in via video conference.

The Russian side of was headed by the Director of the Department of International Cooperation of the Ministry of Energy of the Russian Federation A.N.  Gospodariev and it also included representatives of the Ministry of Energy of the Russian Federation, the Federal State Unitary Enterprise Center for Operational Services (FSUE TsEU) of the Ministry of Energy of Russia, OOO Eurasian Pipeline Consortium (OOO ETK) and PAO TMK.  The Pakistani side was headed by the Director of the International Cooperation Department of the Ministry of Energy of the Islamic Republic of Pakistan, Saira Najib, and it also included representatives of the Ministry of Energy, the Ministry of Foreign Affairs and the NSGP Technical Committee

The parties considered the draft JCC Regulations proposed by the Pakistani side and agreed to exclude from clause 2. Functions and submit the following sub-clauses to ISGS and the nominated Russian company for consideration which includes Technical parameters and related issues;Shareholders Agreement between ISGS and the nominated Russian company;Memorandum and Articles of Association of a special purpose company; Draft Implementation Plan; Sources of supplies of equipment and material support.

The Russian side informed the Pakistani side about the consideration by the relevant federal executive bodies of the Russian Federation of the Protocol on Amendments to the Agreement between the Government of the Russian Federation and the Government of the Islamic Republic of Pakistan on cooperation in the implementation of the North-South gas pipeline project dated October 16, 2015 and reported that  will send an adjusted, but not final version of the specified document to the Pakistani side by January 15, 2020.

The parties discussed the creation of a special purpose company, namely Pakistan Stream Pipeline (Pvt.) Ltd. The Pakistani side presented to the Russian side a presentation of the draft Shareholders Agreement, Memorandum and Articles of Association of the special purpose company.

The parties agreed that FSUE “TsEU”, LLC “ETK” and PJSC “TMK” will comprehensively study the submitted projects of the Shareholders Agreement, Memorandum and Articles of Association of the special-purpose company and prepare comments, suggestions and additions to these documents.

The parties agreed that FSUE “TsEU” On January 20, 2021, will send to the Ministry of Energy (Petroleum Division) the indicated list of materials to the Shareholders Agreement, Memorandum and Articles of Association of the special purpose company. The Pakistani side noted the need for an early approval of these documents in view of the need to start construction no later than mid-2021. The parties agreed, prior to signing the Shareholders Agreement, to create a separate working group to discuss and make joint decisions on the technical parameters of the North-South gas pipeline construction project and hiring design contractors. 

The Russian side proposed to take into account in the project the costs incurred by PJSC “TMK” related to the implementation of PreFEED.  The Pakistani side expressed its readiness to discuss this issue and asked for the results of PreFEED. It is worth to mention here that 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 per cent 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.  In November Pakistan and Russia had agreed to rename the project from North South Gas Pipeline Project to Pakistan Stream Gas Pipeline (PSGP) Project.