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Russia's Rostec and Pakistan to sign contract for construction of gas pipeline in October

In the negotiations, the parties will pay special attention to the tariff for pumping gas and other commercial operating conditions that can affect the project

© AP Photo/Vahid Salemi

MOSCOW, August 4. /TASS/. Starting on August 4, PT Global Resources (100% subsidiary of Rostec) and the Ministry of Petroleum and Natural Resources of Pakistan will hold a series of meetings in Islamabad (Pakistan) to achieve a consensus on commercial aspects of the "North-South" gas pipeline construction project in Pakistan, the company said on Thursday.

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In the negotiations, the parties will pay special attention to the tariff for pumping gas and other commercial operating conditions that can affect the project. On the Pakistani side, the talks will be attended by the Pakistani company ISGS and the Tariff Committee, which was specifically established by the country’s government for negotiations on the project.

"This new round of talks aims to conclude the negotiation stage and allow the parties to sign a document enshrining the fundamental conditions of the project. This will make possible preparations for the signing of main commercial agreements on the construction of the "North-South" gas pipeline by October 16, 2016, in accordance with the schedule specified in the intergovernmental agreement," according to the company’s report.

Earlier, the Economic Coordination Committee has agreed create an SPV (Special Purpose Vehicle) in Pakistan, which will be responsible for implementing the project, which corresponds to the parameters of the intergovernmental agreement. The Committee has also decided to implement the project on BOOT (Build, Own, Operate, Transfer) contract terms, under which the constructed gas pipeline after its commissioning will be owned and operated by the project company for 25 years and then transferred over to the Pakistani side.

Rostec decided to set up RT Global Resources, a corporate competency center dealing with the project planning, support and management, in December 2012. The investment portfolio of RT-Global Resources has more than 10 projects in various commodity sectors, both in Russia and worldwide - Uganda Refinery Project (includes construction of refinery in Uganda); Pakistan Gas Pipeline Project (construction of a 1,100 km gas pipeline with a capacity of up to 12.4 bln cubic meters per year in Pakistan); etc.

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