Pakistan and Russia have signed a revised deal for laying the Stream Gas Pipeline. Project renamed as Pakistan Stream Gas Pipeline due to Islamabad’s major shareholding.
The two sides on Wednesday agreed to rename the North-South Gas Pipeline as the Pakistan Stream Gas Pipeline. It is done due to major shareholding for Pakistan.
They also agreed to execute the project through a special purpose company. Which would be incorporated in Pakistan.
Though Russia will have a minority shareholding in the gas pipeline project. Pakistan will ensure maximum utilization of Russian material, equipment, and resources to enhance the technical and operational capacity of Pakistani companies and human resources through mutual working and training.
Revised Project
In the revised project structure, Pakistan will hold 74% shares whereas Russia will have a 26% stake. Russia had to build the pipeline. And also own, operate, and transfer (BOOT) model and transfer its ownership to Pakistan. Russia had also to make 85% of the required expenditure on the project whereas Pakistan had to spend 15% of the capital.
Now, in the revised model, Pakistan has money on account of gas infrastructure development cess (GIDC) and, therefore, it would contribute 74% of the capital and Russia will make 26% of the expenditure. However, Russia will provide all importable material for the pipeline.
Russia-Pakistan technical committee held its first meeting from November 16-18, 2020 in Islamabad. Energy ministries of the two countries were present in the meeting.
Discussions were aimed at finalizing broad contours and parameters of the project involving the construction of a high-pressure gas transmission pipeline from Port Qasim (Karachi) to Kasur (Punjab) for the transportation of re-gasified liquefied natural gas (RLNG) to meet gas shortage emanating from growing demand from industrial and domestic consumers.
The recent developments came after a decision of the Supreme Court of Pakistan in the matter of GIDC. And the availability of GIDC funds for project development.
