Russia and Pakistan have signed an agreement to build the Pakistan Stream natural gas pipeline formerly known as the North-South Pipeline. In this regard Pakistan’s Ambassador to Russian Federation Shafqat Ali Khan and Minister for Energy, Russian Federation Nikolai Shulginov, signed the Protocol to the Inter-Governmental Agreement (IGA) in Moscow.
The pipeline will run from Karachi to Kasur for transportation of gas. The 1,100-km project, is expected to carry 12.4 billion cubic metres of natural gas annually. The project name was changed to ‘Pakistan Stream’ along with its partnership structure against the risk of US sanctions on Russian companies.
Under the revised IGA, Pakistan has the major shareholding with 74 percent stakes in the pipeline and Russia has 26 per cent equity. As the IGA has been signed now all the technical, commercial issues and design with scope of the project will be decided. There are three proposals about the diameter of the proposed pipeline, which include 42 inches, 48 inches and 56 inches.
Both sides now have 60 days to finalise the shareholding agreement and heads of agreement under various commercial arrangement. A Special Purpose Vehicle (SPV) company will also be constituted that will help materialize the project.