Route survey for North-South gas pipeline completed, tariff being finalized

The route survey for laying 1100 kilometer gas pipeline from Lahore to Karachi (North-South) has been completed and the Price Negotiations Committee, constituted by the Economic Coordination Committee (ECC), is in the process of finalizing its tariff.

“The Russian side has submitted tariff which is in the process of finalization by the Price Negotiations Committee constituted by the ECC, while route for the project has been finalized and submitted for approval of the Ministry of Defence,” official sources told APP.

Currently, they said, Pakistani and Russian experts were in the process of holding negotiations on Build-Operate-Own-Transfer (BOOT) agreement to lay the pipeline for which the two countries had signed an intergovernmental accord on October 16, 2015.

The project, costing around $ 2 billion, faced some delay due to some international sanctions on Russian company RT-Global Resources.

Inter State Gas Systems (Private) Limited (ISGSL) from Pakistan side and RT-Global Resource (RTGR) from Russian side were designated as the entities responsible for the project and negotiating the BOOT agreement, the sources said.

Meanwhile, the US Government had imposed Ukraine related sanctions on the Russian Federation.

The RT-GR is included in the Sectoral Sanctions Identification List maintained by the Office of the Foreign Assets 25 Control. “Given this, the Russian side proposed to implement the Project through Project Implementation Company to be incorporated under the laws of Pakistan. The matter was referred to the Law and Justice Division which opined that the proposal of the Russian side may be considered, as long as the Project implementation company is not hit by the US sanctions while maintaining the majority of Russian ownership,” they remarked.

Under the project, around12.4bcm (billion cubic meters) of gas would be transported per annum through a 42 inch diameter pipeline, they said and described the pipeline of great significance for Pakistan to supply Liquefied Natural Gas (LNG) to consumers in an efficient way.