Pakistan and Russia agree on $2b gas pipeline deal
July 4, 2017- In a major breakthrough, Pakistan and Russia have agreed on a ‘structure agreement’ of the $2 billion North-South LNG pipeline of 700 kilometres starting from Nawabshah to Lahore.
In the deal, Russian company will be having major shareholding and now Moscow will name the company that will be having maximum shares in North-South gas pipeline to avoid any kind of US sanctions.
“We have now agreed on structure agreement and during the current month of July, both sides are set to finalise the build, own, operate and transfer (BOOT) agreement, and once it is done, the physical work on the project will kick star,” a top official privy to the development.
Earlier, Pakistan had told the Russian side in plain words that it has the time till June 30, 2017, for showing seriousness towards the project asking for the structure agreement.
Now both sides have struck the deal on the structural accord. Against the offer of 85 cents per MMBTU as transportation cost by the Russia, Pakistan seeks the reduction and asked for the 78 cents per MMBTU, the official added saying that both sides would soon agree on the tariff.
Pakistan has asked Russia to make a further reduction in the price of liquefied natural gas (LNG) that will be pumped through a planned $2 billion North-South pipeline to satisfy Punjab’s growing energy needs.
Moscow had earlier demanded a fee of $1.2 per million British thermal units (MMBTU) for gas supply. Later, it came up with 85 cents per MMBTU as transportation tariff in the result of talks between experts of Russian team and a negotiating committee set up on part of government of Pakistan.
Now, Pakistan has asked Russia to make a further reduction in the transportation cost by up to 78 cents per MMBTU and hope are very high that both sides would make a deal on the gas transportation tariff.
“After the two sides sign a commercial agreement, ground-breaking of the project will take place, the official said. -Internews