The structure of Rostec will build Pakistan gas pipeline with a capacity of 12.4 billion cubic meters per year

MOSCOW, October 16. The Russian company “RT Global Resources” (part of state Corporation rostec) by mid-2020 will be built in Pakistan gas pipeline with a capacity of 12.4 billion cubic meters per year. As noted by the Ministry of energy, government of the Russian Federation and the Islamic Republic of Pakistan signed an intergovernmental agreement on construction of gas pipeline “North – South” from Karachi to Lahore.

Signatures under the document have put the Minister of energy Alexander Novak and Minister of petroleum and natural resources of Pakistan Shahid Hakan Abbasi.

The pipeline with the length of 1.1 thousand km with a capacity of up to 12.4 billion cubic meters 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. The project will be implemented by the Russian company “RT Global Resources”, a member of the state Corporation rostec.

The gas pipeline construction will allow to provide with orders of the Russian industrial enterprises and to increase non-commodity exports. The project will open up a new market for Russian companies and opportunities for new projects in the energy, infrastructure in Pakistan.

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The project will be implemented by “RT Global Resources” under the scheme BOOT (Build Own Operate 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. Then the pipeline will be transferred to the government of Pakistan. Currently, the company “RT Global Resources” conducts surveys on the pipeline route and engineering / design work.

The construction time of the pipeline is 42 months. The project will be implemented in three stages. In the first stage, by the second quarter of 2018, will build the pipeline. In the second stage, by the second quarter of 2019, the portion of the compressor stations. In the third stage, by the second quarter of 2020, will be put into operation, all compressor stations, and as a result, the pipeline will reach full design capacity of 12.4 billion cubic meters per year.

In plans of the government of Pakistan is large-scale development of the energy sector of the country. Currently under construction is a terminal for the regasification of liquefied natural gas (LNG) in the city of Karachi. In the North of the country will be constructed the plant for which the gas pipeline from Karachi to Lahore will be supplied gas. In addition, in Pakistan Chinese contractors are building other large-scale pipeline Gwadar-Nawabshah, which is connected to the gas pipeline from Karachi to Lahore.

As noted by General Director of “RT-Global resources” Andrei Korobov, in the implementation of the project will be most involved Russian producers and contractors. The possibility of attraction as a supplier of equipment for compressor stations of the United engine Corporation, part of rostec.

A customer partner with the Pakistani side, there is a State-owned company Pakistan – ISGSL, which is engaged in gas supply, and will also pay for the transportation of gas. The government of Pakistan, in turn, 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, and potential construction contractors.