Russia approved the draft of the intergovernmental agreement with Pakistan regarding the construction of the North-South gas pipeline, according to a government resolution posted on the official Russian government website.
Agreement between Russia and Pakistan
According to the Energy Ministry of Russia, the agreement provided a “favorable conditions” to build that North-South gas pipeline from the city of Karachi to Lahore in Pakistan.
Russia’s Ministry of Energy and Pakistan’s Ministry of Petroleum and Natural Resources will supervise and coordinate the implementation of the North-South Gas Pipeline Project.
The project implementation involves Russian equipment, materials, products, and technology. It also requires the participation of Russian organizations to do research, design, and construction.
On the other hand, Pakistan will ensure that rights for the use of the lands required for the implementation of the gas pipeline project. The Pakistani government will also handle surveys and other work related to determine the route for the North-South gas pipeline.
The intergovernmental agreement between Russian and Pakistan is valid for 25 years and subject to automatic extension for five years.
Pipeline project in Pakistan would cost approximately $3 billion
A previous report indicated that RT Global Resources, a subsidiary of Rostec, a Russian state corporation, will handle the construction of oil and liquefied natural gas pipelines and terminals in Pakistan. Rostec estimated that the total cost of the project was around $3 billion.
Last month, Pakistan and India joined the Shanghai Cooperation Organization (SCO), a regional security group led by Russia and China. SCO aims to strengthen the confidence and relationship between its member countries.
During the SCO summit in Ufa, Russia, Pakistani Prime Minister Nawaz Sharif met with Russian President Vladimir Putin, and his government submitted all the paperwork for the construction of the gas pipeline. At the time, Sharif expressed confidence that Russia would approve the deal shortly.
Russian is also interested in the Iran-Pakistan gas pipeline project
Pakistan was pleased after Iran and Western powers reached a nuclear agreement, which provided a new hope for the stalled $7.5 billion gas pipeline project from Iran to Pakistan.
The Iran-Pakistan pipeline project was inaugurated in March 2013. It was interrupted by international sanctions against Tehran because of its nuclear program. Pakistan struggled to raise money to build the pipeline on its side. Iran already built 1,800 kilometers of pipeline, which would eventually link its South Pars gas fields to the city of Nawabshah in Pakistan.
Shahid Khaqan Abbasi, Pakistan’s Minister of Petroleum and Natural resources believed that the Iran nuclear deal would allow the completion of Iran-Pakistan pipeline project.
“Now hopefully, as the sanctions are removed, it facilitates us to address our energy need and also meet the contractual obligation,” said Abbasi.
Russia is also interested in supporting the Iran-Pakistan gas pipeline project through Gazprom.
According to Yury Barmin, an analyst expert on Russia’s Middle East policy commented that the Iran-Pakistan gas pipeline project would help Moscow strengthen its relationship with Islamabad, and to show India that it has other options in the region.
Additionally, “Russia really wants to explore commercial opportunities for its defense industry in the wider MENA (Middle East) region, and Pakistan is probably the only remaining untapped market for Moscow in that sense,” said Barmin.