Pakistan and Russia are set to formally sign today (Friday) an amended Inter-Governmental Agreement (IGA) for the Pakistan Stream Gas Pipeline (PSGP) project .
Pakistan’s Ambassador to Russia, Shafqat Ali Khan, will sign the protocol on the amendments to the agreement on behalf of Pakistan in Moscow on Friday.
The cost of the project has been estimated at $2.25 billion by Pakistani officials, which is not yet finalised by the Russian side. Under the revised agreement, Pakistan will own 74 percent stakes in the pipeline and Russia 26 percent.
Once the amended agreement is signed, both sides will have to sign within 60 days the shareholding agreement, heads of agreement under various commercial arrangements and a Special Purpose Vehicle (SPV) company will also be constituted that will materialise the project.
The Pakistan Stream Gas Pipeline project will deliver gas from coastal regions to industrial areas in the north and will boost the country’s capacity to internally transport imported LNG. It has been held up since 2015 due to a disagreement over fees and the US sanctions against Russian state conglomerate Rostec.
Last November, Russian officials visited Pakistan for three-day-long negotiations to finalise work on the project, the biggest infrastructure deal with Russia since the early 1970s when the Soviet Union set up the Pakistan Steel Mills industrial complex at Port Qasim, near Karachi.
The project was also a main topic of discussion during Russian foreign minister Sergey Lavrov’s two-day trip to Islamabad last month. Indigenous natural gas contributes around 38 percent to Pakistan’s total primary energy supply mix.
Pakistan produces around 4 billion cubic feet per day against an unconstrained demand of 6 bcfd and imports gas to meet the deficit, particularly when demand peaks in winters.
Originally published at Daily times