ISLAMABAD: Ministry of Petroleum and Natural Resources is seeking necessary approval from the Economic Coordination Committee (ECC) of the Federal Cabinet to execute the $2 billion North- South gas pipeline project, a senior official of the ministry said Wednesday.
"The contract parties are presently evaluating the contract model, structure including financing issues, issuance of sovereign guarantee for gas volume off take (1.2 bcfd) and other implementation related issues for which necessary approvals are being sought from ECC of the Cabinet," he told APP.
Earlier, he said, the ECC had okayed the project on January 10, 2015, but now the ministry needed further approval of some technical and financial aspects of the pipeline.
Under the project, a 1100 kilometer pipeline from Karachi to Lahore with Russian investment of $2 billion would be built.
He said Russia had nominated RT-Global Resources (RT-GR) company, while Pakistan had designated Inter State Gas System ISGS (Private) Limited to execute the project in liaison with Sui Northern Gas Pipeline Limited and Sui Southern Gas Company Limited, under the government-to-government agreement between the two countries.
He said the pipeline was being constructed on built operate and transfer (BOT) basis, which would connect liquified natural gas (LNG) terminals located in Karachi with those of Lahore.
He said the companies had been mandated to define the technical and economic parameters of the project, signed on October 16, 2015, within 12 months from the signing of the agreement.
Following the agreement, the official said the techno-commercial negotiations between the nominated entities RT-GR and ISGS had been initiated.
He said the preliminary study of the proposed route corridor had been completed and a couple of negotiation rounds had been held between the companies for the project implementation, adding "the commercial negotiations are expected to take three to four months."
He said the project would not only help transport Regassified Liquified Natural Gas but also give transport capabilities for the Iran-Pakistan (IP) and Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline projects "Which are expected to come on line in next three to five years."
"Pakistan is passing through a severe energy crisis and the project will prove to be a milestone to overcome it," he remarked.
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