Pakistan, Russia ink deal for feasibility study on $10b offshore pipeline

Published: September 27, 2018
Two sides express interest in ramping up bilateral ties in energy sector. PHOTO: FILE

Two sides express interest in ramping up bilateral ties in energy sector. PHOTO: FILE

ISLAMABAD: Pakistan and Russia signed a deal on Thursday for conducting feasibility study on a planned $10-billion offshore gas pipeline, an idea coined by Moscow to capture the energy market of Pakistan.

Ministry of Energy (Petroleum Division) Additional Secretary Sher Afgan and Deputy Energy Minister of Russia Anatoly Yanovsky signed a memorandum of understanding (MoU) for undertaking the study.

Inter State Gas Systems (ISGS) Managing Director Mobin Saulat was also present at the ceremony. On the occasion, the two sides expressed interest in enhancing bilateral relations in the energy sector.

ISGS – a state-owned Pakistani company established to handle gas import projects which is already working on schemes like the Turkmenistan-Afghanistan-Pakistan-India (Tapi) gas pipeline – has been designated by Pakistan for executing the pipeline project along with Russia’s energy giant Gazprom.

Pakistan, Russia to ink $10 billion offshore pipeline deal

Gazprom will conduct the feasibility study and bear its expenses in order to assess economic viability and cost of the project.

The China-Pakistan Economic Corridor (CPEC) has now entered the industrialisation phase and needs gas for duty and tax-free Special Economic Zones (SEZs). The offshore gas pipeline will meet energy needs of the industries being set up in the SEZs along the CPEC route.

According to officials, the pipeline will connect Pakistan and Russia and act as an energy corridor between the two countries.

“Strategically, it is a very important project as the two countries will come closer to each other,” an official said. “At the same time, Pakistan will gain access to the Russian market in order to boost its overall exports which remained stagnant during five-year tenure of the PML-N government.”

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Russia has nominated Public Joint Stock Company Gazprom for implementation of the project. Pakistan’s cabinet has permitted the company to conduct the feasibility study at its own cost and risk.

Separately, ISGS is working on the $10-billion Tapi gas pipeline which will connect South and Central Asia. Construction work on the scheme in Pakistan is planned to start in March 2019.

These projects are termed game changer for Pakistan as they will not only lead to regional connectivity, but will also meet growing energy needs of the country.

Owing to a long-running tussle with Europe and the US over the annexation of Ukrainian region of Crimea, Russia is looking for alternative markets and wants to capitalise on increasing energy demand in South Asia.

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Reader Comments (2)

  • Shameless
    Sep 27, 2018 - 7:34PM

    Can we really get some guts and focus on IP gas line?

    India is doing trades both with Iran & Russia and are not worried about sanctions but our old and new leaders are both submitting to saudia & america/israel.

    taking gas from Iran is easier or taking it from all the way to Russia or TAPI?Recommend

  • cuban
    Sep 28, 2018 - 1:30AM

    Pakistan is arguable over extended and obligating us to another $10 billion for a project which has no urgency seems questionable. On a refreshing note – seems like Russia is willing to fund a feasibility study which makes sense … let hope our “experts’ take the time to review/validate the results and make the appropriate decision to cancel or go forward. Recommend

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