IP gas pipeline: Russia to know next week if they are in or out

Published: September 6, 2012
Pakistan is negotiating the construction of IP gas pipeline with Iran, China and Russia. PHOTO:FILE

Pakistan is negotiating the construction of IP gas pipeline with Iran, China and Russia. PHOTO:FILE

ISLAMABAD: Pakistan and Russia are going in for final rounds of negotiations next week to decide whether energy giant Gazprom will participate in the project or not amid sanctions imposed by the US on Iran.

“If there is a breakthrough, Pakistan and Russia could sign a deal to award IP gas pipeline project to Russian energy giant Gazprom during the upcoming visit of Russia President Vladimir Putin to Pakistan next month,” a source said.

Russia Minister for Sports and Tourism Vitaly Mutko will chair the inter-governmental commission (IGC) meeting on Monday next week in Islamabad to negotiate deals to award contracts like IP and TAPI gas pipeline projects, CASA 1,000MW power import project and expansion of Pakistan Steel Mills.

“The delay in striking deals between Pakistan and Russia on IP gas pipeline project is due to international complications relating to Iran,” a source said adding that Russia is still interested in IP gas pipeline project despite opposition of US.

The Pakistani government had submitted detailed engineering design of IP gas pipeline project during a meeting of Pak-Russia joint Working Group Meeting held in last week of June.

Under the energy cooperation programme, Pakistan wants to award the contract of IP gas pipeline without bidding as it is facing financial difficulty in raising finance due to sanctions imposed on Iran. Russia has also offered financing for the transnational Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project.

At present, Pakistan is negotiating the construction of IP gas pipeline with three countries – Iran, China and Russia. China has not still responded to the offer while talks are on going with Iran.

“We will award the IP contract to the country which first extends finance for constructing the pipeline,” the official said.

Power projects

In the working group meeting, the Russian authorities offered $500 million for the Central Asia South Asia (CASA) electricity import project, which would bring electricity from Central Asian states. During the IGC meeting, the two sides would finalise modalities of the agreement.

Under the project floated in 2006, 1,000 to 1,300 megawatts of surplus electricity will be imported from Tajikistan and Kyrgyzstan. “US, World Bank and Islamic Development Bank (IDB) have also backed the project,” an official said.

Moscow has also agreed to finance rehabilitation of Guddu and Muzaffargarh power plants and a deal would be discussed during talks.

Pakistan Steel Mills expansion project

In addition to this, the two sides would discuss a deal for expansion of financially troubled Pakistan Steel Mills. They two countries last month had discussed ways of enhancing the capacity of steel mills with promise of Russian support.

Under the programme, the mill’s production capacity will be enhanced to 1.5 million tons per annum from existing 1.1 million tons. Initial cost of the project is estimated at Rs30.45 billion, though actual cost will be determined after a technical audit of the plant by a Russian company.

Published in The Express Tribune, September 6th, 2012.

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Reader Comments (9)

  • Vikas
    Sep 6, 2012 - 8:20AM

    Pakistan looking for new masters now.


  • Anoni
    Sep 6, 2012 - 9:29AM

    Some interesting postive news but let just wait for it to mature first. The best diplomatic solution for our country is to have friend around us and so far it seems our FO is not doing a good job.


  • Vigilant
    Sep 6, 2012 - 1:16PM

    Why to import electricity from other countries by spending $500M. This amount could be spent to build our local capacity


  • antanu g
    Sep 6, 2012 - 1:57PM

    new relations do not means new masters….india was a close friend of Russia…later it developed new relation with US . Does it mean US is india’s new master?


  • Vikas
    Sep 7, 2012 - 12:32AM

    @antanu g:
    We were never in Soviet Camp or American Cento Seato camp. We were independent. Even Soviets wanted to make some alliance with India against China, after 71 war, which Mrs. Gandhi refused. This is called independent policy.


    Sep 7, 2012 - 12:40AM

    Mr Vikas should mind his own business.


  • Ali
    Sep 7, 2012 - 3:43PM

    @ Vikas well don’t act like a jealous kid whose friend are being stolen by a Popular and way more cooler kid. Well India was in soviet camp accept it or not fact is fact, when Russia was defeated you were alone on International stage and story is again repeating itself this time around USA is showing you the bone.


  • antsnu g
    Oct 9, 2012 - 8:57PM

    how old are you my dear…in your teens? go through the geopolitical scenario of 60s to 80s …it will open your eyes.a little learning is a dangerous thing…and u are a victim of LITTLE KEARNING SYNDROME.Recommend

  • Oct 14, 2012 - 9:03AM

    Now or never b/c Iranian Gas will flow soon to Europe,Iraq,turkey etc


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