KARACHI: Pakistan and Russia on Friday signed an amended inter-governmental agreement for a flagship pipeline that will be constructed by Moscow to connect the Pakistani cities of Karachi and Kasur, said a statement released by the Russian energy ministry.
The project, earlier called the North-South Pipeline but recently renamed the Pakistan Stream Gas Pipeline Project, will deliver gas from Pakistan's coastal regions to industrial areas in the north and will boost the country's capacity to internally transport imported liquefied natural gas (LNG).
It was held up since 2015 due to a disagreement over fees and United States sanctions against Russian state conglomerate Rostec.
The revised agreement was signed in Moscow between Russia's energy minister Nikolay Shulginov and Pakistan's envoy to the Russian Federation Shafqat Ali Khan.
The construction of the gas pipeline is estimated to cost about $2.2 billion, though its official cost is yet not confirmed.
The project is Russia's biggest investment in the South Asian state after Moscow built the Pakistan Steel Mills in July 1973. It is also expected to usher in a new era of economic cooperation between the two countries.
"The gas pipeline with a length of over 1,122 kilometers and a throughput capacity of up to 12.3 billion cubic meters per year will connect terminals for receiving liquefied natural gas in the ports of Karachi and Gwadar in the south of Pakistan with power plants and industrial gas consumers in the Kasur district in the north of the country," said the Russian energy ministry in an official statement.
"The construction of the Pakistan Stream gas pipeline remains the flagship project of bilateral cooperation between Russia and Pakistan in the energy sector," it quoted Shulginov. "Both countries attach a high priority to the project."
The statement maintained that the relevant institutions of the two countries had done a lot of work to prepare the new document containing the amendments, adding that "its signing will allow our companies to begin practical implementation of the project in the very near future."
Shulginov said this would help "the Pakistani side to strengthen its own energy security and increase the use of natural gas as an environmentally friendly source of energy."
The agreement materialized after a technical committee meeting between the two countries last November wherein the Russian side expressed its preference for the build, own, operate and transfer model for a 25-year term.
