Russia and Pakistan have agreed to build the Pakistani Stream gas pipeline, the Russian Energy Ministry said. Previously, the project was called “North-South”, but this year it was renamed “Pakistani Stream”.
«[Министр энергетики России] Nikolai Shulginov and Pakistani Ambassador to the Russian Federation Shafkat Ali-Khan signed a protocol on amendments to the intergovernmental agreement on cooperation in the implementation of the North-South gas pipeline construction project, ”the statement said. This project has been named “flagship” in the energy relations between Moscow and Islamabad.
A gas pipeline with a length of over 1.1 thousand km and a throughput capacity of up to 12.3 billion cubic meters. m per year will connect terminals for receiving liquefied natural gas (LNG) in the ports of Karachi and Gwadar in the south of Pakistan with power plants and industrial gas consumers in the Kasur district (Punjab) in the north of the country.
A preliminary agreement on the project was signed in October 2015. However, in 2019, there was a threat of sanctions for Rostec and the Pipe Metallurgical Company (TMK) participating in the project. Initially, it was assumed that from the Russian side, the installation would be carried out by RT – Global Resources (part of Rostec), from the Pakistani side – by Inter State Gas Systems, which is engaged in the implementation of strategic infrastructure projects in the gas industry.
In November 2020, Moscow and Islamabad renegotiated the terms of the agreement. The share of Pakistani companies increased from 51% to 74%, Russian ones, respectively, decreased to 26%. In March 2021, construction contractors changed: now the highway must be built by a special purpose company (SPV), which is being created in Pakistan together with Inter State Gas Systems. Instead of the Rostec structure, on the Russian side, the project will involve a company established by the Center for Operational Services, the Ministry of Energy, the Eurasian Pipeline Consortium (ETK), and the Pipe Metallurgical Company (TMK). According to the protocol, its share in SPV remained at the level of at least 26%. Construction is scheduled to start in July this year.
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