Pakistan, Russian Federation sign US$ two bln pipeline deal

A unit of Russian state company Rostec will build a new gas pipeline in Pakistan which will connect Karachi with the provincial capital of Lahore, Rostec said on Friday.

Prime Minister Muhammad Nawaz Sharif witnessed the signing ceremony.

The project will be capable of transporting 1.2 billion cubic feet of gas from Karachi to Lahore by laying 42 inch diametre pipeline.

One MoU was signed with state-owned Oil and Gas Development Company (OGDCL) for E&P co-operation on broader terms within their blocks for mutual benefit in a bid to speed up exploratory activities in Pakistan and increase Russia-Pakistan co-operation. The route of the pipeline is now being surveyed and design and engineering work is underway.

According to official sources, Russian Federation will make an investment of two billion dollars in the pipeline project and the first phase of the deal will be completed by December 2017.

The $7.5-billion IP pipeline was inaugurated with great fanfare in March 2013 – but the project immediately hit quicksand in the form of global sanctions on Tehran, which meant cash-strapped Pakistan struggled to raise the money to build its side. The Economic Coordination Committee (ECC) had approved the North-South Gas Pipeline Project under government-to-government agreement in January 2015.

Pakistan s key ally China is now financing the construction of a gas pipeline from the southern town of Nawabshah to the deepwater port of Gwadar, not far from Iran.