Pakistan and Russian Federation signed a government-to-government agreement on laying Karachi-Lahore Liquefied Natural Gas (LNG) pipeline today (Friday). Federal Minister for Petroleum, Shahid Khaqan Abbasi singed the agreement from Pakistan side. Under the inter-governmental agreement, the Russian Federation through its state corporation RT-Global Resource will collaborate with Pakistan’s Inter-State Gas System (Pvt.) Ltd for the laying of pipeline.
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Russian Federation has always been the largest supplier of weaponry to Pakistan’s nuclear-armed arch rival India, which is the world’s top arms buyer.
Tehran has already built its part of the 1,800-kilometre (1,100-mile) pipeline which should eventually link its South Pars gasfields to the Pakistani city of Nawabshah, close to the economic capital Karachi.
The project will be carried out under a BOOT (Build Own Operate Transfer) arrangement.
One MoU was signed with state-owned Oil and Gas Development Company (OGDCL) for E&P co-operation on broader terms within their blocks for mutual benefit in a bid to speed up exploratory activities in Pakistan and increase Russia-Pakistan co-operation. Over this period, investment will be recovered with the required return on equity through the gas transport tariff, after which the pipeline will be handed over to the government of Pakistan.
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It added that the construction is expected to take 42 months, with the pipeline reaching its full capacity by the second quarter of 2020 and expected costs of around $2.5 billion.
