Russia expresses concern over reports of another gas pipeline from Pakistan, Energy News, ET EnergyWorld

Islamabad: Russia has expressed concern over reports that Pakistan is considering developing another plan to build the $ 2.5 billion Pakistan-Stream Gas Pipeline Project (PSGP) from Port Qasim to Kasur, formerly known as the name of North-South gas pipeline.

The information was leaked by sources close to the Prime Minister’s Special Assistant (SAPM) for Electricity and Oil, Business Recorder said.

This may jeopardize Pakistan’s relations with Russia. Pakistan and the Russian Federation had signed the amended Intergovernmental Agreement (IGA) on May 28 in Moscow on the Pakistan Stream Gas Pipeline (PSGP) project, now the two countries must sign the shareholders agreement (SHA) in the 60 days from the signing of the protocol scheduled for July 27.

The Foreign Ministry conveyed Moscow’s concerns to the Petroleum Division, ahead of a visit by a 12-member delegation headed by AA Tolparov, deputy director of the Department of Foreign Economic Cooperation and Fuel Market Development. The delegation held four-day talks with Pakistan which began on Monday, Business Recorder reported.

Moscow sent a letter to Islamabad on June 7, informing that a Russian delegation wishes to travel to Pakistan from June 22 for discussions on the terms and conditions and the shareholders agreement with the participation of the designated entities ISGS and ” PAKSTREAM “and the competent authorities of Pakistan.

The oil division, which previously agreed to a 56-diameter pipeline with Russia, is now considering using 42 diameters, which is more expensive.

Meanwhile, US Chargé d’Affaires Angela Aggeler also met with SAPM on Electricity and Oil a few days ago and requested an update on the pipeline project.

Some stakeholders fear that the meetings of the Americans before talks with the Russians are aimed at creating confusion, which will not be appreciated at the highest level, Business Recorder reported.

The problems started soon after the signing of the amended AGR. Until 27 days after the agreement was signed, the Cabinet Committee on Energy (CCOE) which met on June 24 asked the Petroleum Division to finalize an alternative gas pipeline project by mid -July 2021, arguing the massive negative consequences of the delay in the implementation of the PSGP and the deadline set by the Supreme Court have already been exceeded.

The petroleum division has drawn up an alternative plan under which the petroleum division wants to build the LNG-III gas pipeline under the consortium of Sui Southern, Sui Northern and PAPCO – the PARCO company.

The oil division favors the alternative project in case negotiations with Russia fail on the PSGP / also known as the North-South gas pipeline. The petroleum division’s proposal is based on the decision of the Economic Coordination Committee (ECC) of January 5, 2018, under which financing was approved for the RLNG-III gas pipeline with a capacity of 1.2 billion feet cubes per day (BCFD) of 1,150 km from Karachi to Lahore. by a 42-inch diameter pipeline.

Later, the CCOE’s decision, the Petroleum Division responded to the Russian letter and informed them of Pakistan’s willingness to negotiate the shareholders’ agreement.

In the meantime, Prime Minister’s Special Assistant Tabish Gauhar has already favored Sui Southern and Sui Northern to develop the LNG-III gas pipeline from Karachi to Lahore in place of the PSGP, arguing that the country does not rely on the outside help because that would make the situation worse. cost of the project, The News International reported.

The shareholders’ agreement and terms and conditions agreement with Russia could take more than a year and a half before preparations for the project can begin. In addition, the oil division decided not to extend the guaranteed rate of return to the Russian side against its 26% stake in Pakistan Stream Gas Pipeline.

According to Tabish Gauhar, it has been decided that the government will not provide any sovereign guarantees of profit on any foreign investment in Pakistan in any sector of the economy, whether in the electricity and refining sectors.

The Russian Federation has been negotiating this project with Pakistan since 2015 and has witnessed many upheavals leading to the delay. Reviewing the process since 2015, from structural change, inequalities of change to IGA changes, Pakistani authorities are responsible for the delay and not the Russian Federation, reported The News International. (ANI)

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