Daughter of Rostec thinking of loans in Russia and China for gas pipeline in Pakistan

Daughter of Rostec thinking of loans in Russia and China for gas pipeline in Pakistan


The Russian company “RT Global resources”, part of rostec, will build the gas pipeline “North-South” from Karachi to Lahore. The agreement was signed in Islamabad.

MOSCOW, 16 Oct. “RT Global resources” (included in “rostec”) is considering the possibility of raising loans to Russian and Chinese development banks for the project of construction of gas pipeline “North-South” in Pakistan, said in a statement the Ministry of energy of the Russian Federation.

Minister of energy Alexander Novak and Minister of petroleum and natural resources of Pakistan Shahid Hakan Abbasi in Islamabad signed an intergovernmental agreement on construction of gas pipeline “North-South” from Karachi to Lahore; the project will be implemented by the Russian company “RT Global resources”. Partner-customer is the state company of Pakistan ISGSL, which is engaged in gas supply, and will also pay for the transportation of gas. The Pakistani government will issue a sovereign guarantee for the payment of tariff, and project financing.

“The Russian side is considering the possibility of borrowing from the Russian and Chinese development banks supported by the export credit agencies. “RT Global resources” will create a consortium, which will include Russian and foreign investors, including Chinese, Pakistani, as well as the potential construction (EPC) contractors”, — stated in the message.

The gas pipeline which is 1.1 thousand kilometers with a capacity of up to 12.4 billion cubic meters of gas per year will connect the terminals for liquefied natural gas (LNG) in the port city of Karachi in southern Pakistan city of Lahore in the North of the country. At the moment we are surveying the pipeline route.

The construction time of the pipeline is 42 months. The project will be implemented under the scheme BOOT (Build-Own-Operate-Transfer, build-own-manage-transfer). The constructed pipeline will be owned and operated by the project company for 25 years. During this period, at the expense of the tariff for pumping gas, is expected to make a return investment with the required return on equity, after which the pipeline will be transferred to the government of Pakistan.