North-South gas pipeline: Ministry seeks ECC’s approval to execute $2b project

The 1100km pipeline would connect LNG terminals located in Karachi with those in Lahore

ISLAMABAD: The Ministry of Petroleum and Natural Resources is seeking necessary approval from the Economic Coordination Committee (ECC) to execute the $2 billion North-South gas pipeline project, according to a senior official of the ministry.

“The contract parties are presently evaluating the contract model and structure including the issuance of sovereign guarantee for gas volume off take (1.2 bcfd) and other financing and implementation issues for which necessary approvals are being sought from the ECC,” he said.



According to the official, the ECC gave the ‘go ahead’ to the project on January 10, 2015 but now the ministry needed further approval on some technical and financial aspects of the pipeline.

Under the said project, a 1,100-km pipeline from Karachi to Lahore will be built with Russians investing $2 billion.

“Russia has nominated RT-Global Resources (RT-GR) company while Pakistan has designated the Inter State Gas System (ISGS) Private Limited to execute the project in liaison with the Sui Northern Gas Pipeline Limited (SNGPL) and Sui Southern Gas Company Limited (SSGC), under government-to-government agreement between the two countries,” informed the official.

“The pipeline is being constructed on ‘built operate and transfer’ (BOT) basis, which would connect liquefied natural gas (LNG) terminals located in Karachi with those of Lahore,” he added.

The companies have been mandated to define the technical and economic parameters of the project, signed on October 16, 2015; within 12 months from the signing agreement, following which the techno-commercial negotiations between the nominated entities RT-GR and ISGS were initiated.



The official said the preliminary study of the proposed route corridor had been completed and a couple of negotiation rounds had been held between the companies for the implementation. “The commercial negotiations are expected to take three to four months,” he added.

The project would not only help transport the Re-gasified Liquefied Natural Gas (RLNG) but also give transport capabilities for the Iran-Pakistan (IP) and Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline projects, expected to come online in the next three to five years. 

Published in The Express Tribune, March 31^st,  2016.

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