The 1,100-km pipeline will have the capacity to carry up to 12.4 billion cubic meters of gas per year. Source: Flickr/ FarvBillerMoker
Russian Energy Minister Alexander Novak and Pakistan's Petroleum and Natural Resources Minister Shahid Khaqan Abbasi have signed an intergovernmental agreement on the construction of the North-South gas pipeline from Karachi to Lahore, Russia's Energy Ministry said. The agreement was signed in the presence of Pakistani Prime Minister Nawaz Sharif.
The project will be carried out by RT-Global Resources, a division of Russian state corporation Rostec. The route of the pipeline is now being surveyed and design and engineering work is underway.
The 1,100-km pipeline with capacity to carry up to 12.4 billion cubic meters of gas per year will connect the liquefied natural gas (LNG) terminal at the Karachi port in southern Pakistan to the city of Lahore in the northern part of the country.
"Russia and Pakistan have a long, successful history of cooperation dating back to the Soviet era. The construction of the North-South pipeline brings trade and economic cooperation between Russia and Pakistan to a new level," Novak was quoted as saying.
The project will be carried out under a BOOT (Build Own Operate Transfer) arrangement. The pipeline will be owned and operated by the project company for 25 years. Over this period, investment will be recovered with the required return on equity through the gas transport tariff, after which the pipeline will be handed over to the government of Pakistan.
The Karachi-Lahore pipeline project is expected open up a new market for Russian companies and opportunities to carry out new energy infrastructure projects in Pakistan, provide orders for Russian manufacturers and make it possible to boost Russia's non-resource exports.
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