The government of Pakistan approved construction of the "North-South" gas pipeline

The government of the Islamic Republic of Pakistan approved construction of the North-South gas pipeline, responsibility for which realization is conferred on "RT-Global resources" (100% subsidiary of the Rostec Corporation).

According to decisions of the Committee on coordination of economic activity of the Government of the republic the package of measures for implementation of the project was approved on April 11, 2016. The key decision on implementation of the project on terms of the BOOT contract (Build Own Operate Transfer) according to which the constructed gas pipeline after commissioning will be in property of the design company within 25 years was made, and then it will be transferred to the Pakistani side.

The offered strategy and the concept of stage-by-stage input of capacities of the gas pipeline in operation according to prime needs of national economy, and also a route configuration was approved by the Government of Pakistan. For implementation of the project objectives the Government of Pakistan agreed on the creation of a special purpose project company (SPV, Special Purpose Vehicle) with participation of the Russian side. The company will be registered in the territory of the Islamic Republic of Pakistan that corresponds to parameters of the Intergovernmental agreement.

The committee on coordination of economic activity of Pakistan approved the right for issuing of the state guarantee according to obligations of payment for transportation of gas of not less than 1,2 billion cubic feet of gas a day.

The decisions made by the Government of Pakistan are the following step to signing of all necessary commercial agreements on implementation of the project of construction of the "North-South" gas pipeline. According to conditions of the Intergovernmental agreement between Russia and Pakistan signed in October, 2015 by the Minister of Energy of the Russian Federation Alexander Novak and the Minister of oil and natural resources of Pakistan Shahid Hakan Abbasi, responsibility for implementation of the project was conferred on "RT-Global resources".

As the CEO of "RT-Business development" (owns 100% of "RT-Global resources") Andrey Korobov declared, "we welcome the decision of the Pakistani side. The received approvals from the Government of the Islamic Republic of Pakistan is a key milestone in implementation of the project of construction of the "North-South" gas pipeline. Within several months the parties conducted a serious preparatory work on coordination of the specification which to our satisfaction ended with success. Now "North-South" has accurate design parameters. The approval allows us to pass to the final coordination with the Pakistani partners of a formula of a tariff for pumping and signing of the contract then the design company will carry out deliveries of pipes and other equipment for the timely beginning of construction of the gas pipeline".

Note

In October, 2015 in Islamabad signing of the intergovernmental agreement between the government of Russia and the government of Pakistan on the construction of the "North-South" gas pipeline from Karachi to Lahore took place. The "North-South" gas pipeline 1,1 thousand km long with a throughput up to 12,3 billion cubic meters a year will connect terminals on reception of the liquefied gas (LNG) in a seaport of Karachi in the south of Pakistan with power plants and industrial consumers of gas in the city of Lahore in the north of the country.

Responsibility for implementation of the project is conferred on the Russian company "RT - Global Resources" (100% subsidiary of the Rostec Corporation). Participation in the project of construction of the gas pipeline will allow to provide Russian industrial enterprises of oil and gas sector with additional orders and to increase non-oil export. Implementation of the project in Pakistan will open a new market for Russian companies and opportunity for implementation of new projects in the field of power infrastructure of the region. The" North-South" gas pipeline along a route of Karachi-Lahore is the joint project, the first for long time, between the Russian Federation and the Islamic Republic of Pakistan realized on the basis of the intergovernmental agreement.