NSGPP agreement to be signed: Russian delegation arrives next week

ISLAMABAD: A Russian technical delegation is scheduled to arrive in Pakistan on Monday for three days to discuss the North-South Gas Pipeline Project (NSGPP), an official of the Petroleum Division told Business Recorder. Pakistan and Russia are expected to finalise an agreement to start work on the over $2 billion NSGPP in the first quarter of 2021 calendar year.

The gas pipeline project has been revised upwards by changing its route and diameter. Pipeline on the new route between Karachi and Lahore will be around 1,700km long. Its transmission capacity was also enhanced from one to 1.6 billion cubic feet (bcf).

The current capacity for gas supply will be two bcf, which can increase up to three bcf in the next 10 years.

In October 2020, Special Assistant to Prime Minister Nadeem Babar stated that the government was compelled to show progress on the proposed pipeline till February 2021, in line with a directive of the Supreme Court in the gas infrastructure development cess (GIDC) case.

On August 14, 2020, the Supreme Court of Pakistan barred the government from using GIDC collection for any purpose other than gas infrastructure construction.

After the apex court's decision on the GIDC, the government wants to keep majority equity share in the project and proposed 51 percent share for Pakistan, while Russia gets 49 percent, sources said.

According to the website of the Finance Division, the federal government has collected Rs 4.994 billion in the first quarter (July-September) of the current financial year against the budgeted Rs 15 billion for the financial year 2020-21.

The Supreme Court judgment in the GIDC case allowing the government to recover the unpaid fee of Rs405bn from industrial consumers of natural gas seeks to resolve an issue that has been dragging on for a decade.

The levy was imposed in 2011 to raise funds for gas infrastructure development. The total GIDC accrued so far is Rs700bn, of which about Rs295 billion has been collected. Rs 405 billion will be recovered now.

Copyright Business Recorder, 2020