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Gazprom is interested in LNG supplies to Pakistan

November 20, 2015, 10:36 UTC+3 ISLAMABAD
According to co-chairman of the Russian-Pakistani intergovernmental commission Viktor Ivanov, this will ensure the maximum throughput of the pipeline, which is to be built in the future
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© TASS

ISLAMABAD, November 20. /TASS/. Russia’s Gazprom is interested in supplies of liquefied natural gas (LNG) to Pakistan, co-chairman of the Russian-Pakistani intergovernmental commission Viktor Ivanov said on Friday.

"Gazprom is interested in entering the Pakistani market with LNG — this will ensure the maximum throughput of the pipeline, which is to be built in the future. Gazprom has capacities for pumping up to 12 billion cubic meters," he said.

According to him, the implementation of the gas pipeline project will contribute to development of cooperation between the countries in high-tech industries.

"We have serious progress in the energy sector," the co-chairman of the intergovernmental commission said.

According to Russia's trade representative in Pakistan Yuri Kozlov, if the parties reach an agreement on LNG supplies a relevant intergovernmental agreement will be signed.

The intergovernmental agreement for the construction of the North-South pipeline was signed on October 16, 2015.

RT-Global Resources, which is part of Russian state corporation Rostec, has started to work on the construction of the North-South gas pipeline in Pakistan and will carry out the project by mid-2020.

The relevant paragraph is included in the protocol of the intergovernmental Russian-Pakistani commission, which met on Friday.

According to Rostec, the construction will cost about $2-2.5 billion.

The 1100 km long gas pipeline will link liquefied natural gas (LNG) terminals in the port of Karachi in the south of Pakistan with the city of Lahore in the north of the country.

The period of construction is 42 months. The project will be implemented in three stages. On the first stage, by the second quarter of 2018, the gas pipeline will be built.

On the second stage, by the second quarter of 2019, part of compressor stations will be completed.

On the third stage, by the second quarter of 2020, all compressor stations will be commissioned bringing the pipeline to its full capacity, which is 12.4 billion cubic meters a year.

The construction of the pipeline will provide orders for Russian industrial enterprises and will contribute to an increase in non-oil exports. The project will open up a new market for Russian companies.

The project will be implemented in compliance with BOOT model (Build Own Operate Transfer). The built pipeline will be owned and operated by the project company for 25 years. During this period payments for gas deliveries will help the company return the investments and make profit. After that the pipeline will be handed over to the government of Pakistan.

Currently, RT-Global Resources is conducting surveys and engineering work along the pipeline route.

According to Andrey Korobov, general director of RT-Global Resources, the project’s implementation will imply maximum involvement of Russian producers and contractors. In particular, Rostec considers attracting the United Engine Corporation as a supplier of equipment for compressor stations of the future pipeline, he said.

Head of Rostec Sergey Chemezov said that the contests for contractors to build the pipeline in Pakistan will be held in 2016.

Pakistan’s state gas supplying company ISGAL acts as a partner customer in the project and will pay gas transportation services. In its turn, the government of Pakistan will issue a sovereign guarantee for project financing.

The Russian side is considering possibilities to attract loans from Russian and Chinese development banks with the support of export credit agencies.

RT-Global Resources will create a consortium uniting Russian and foreign investors including Chinese and Pakistani ones as well as potential contractors," the corporation said in the statement.

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