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Protocol on amendments to Pakistan-Russia IGA on NSGP project approved

ISLAMABAD: Pakistan has approved protocol on the amendments in Inter Governmental Agreement (IGA) between Pakistan...
Updated 17 Mar, 2021

ISLAMABAD: Pakistan has approved protocol on the amendments in the Inter-Governmental Agreement (IGA) between Pakistan and Russia on North-South Gas Pipeline (NSGP) project, sources close to SAPM on Petroleum Nadeem Babar told Business Recorder.

Minister for Planning, Development and Special Initiatives, Asad Umar, is said to have forced the Petroleum Division to place the protocol before the Cabinet as the proposals, according to him, require detailed discussions.

According to sources, Petroleum Division briefed the Cabinet that the summary on North-South Gas Pipeline (NSGP) Project-approval of protocol on the amendments in the Inter-Governmental Agreement between Governments of Pakistan and the Russian Federation for approval of the Cabinet was circulated in terms of rule 17(1)(b) of Rules of Business, 1973, among 28 Federal Minister for recording opinion and subsequent return to the Cabinet Division.

Fifteen members of the Cabinet endorsed the proposal of the Petroleum Division, replies from twelve members were not received within the stipulated time, whereas one Minister - Minister for Planning, Development and Special Initiatives - observed as follows: "The proposals require detailed discussions and may, therefore, be placed before the Cabinet either directly or through one of the Committees".

The summary was subsequently submitted to the Prime Minister for approval. Keeping the observation of the Member in view, the Prime Minister directed that the matter may be placed before the Cabinet, in terms of rule 19(3) of the Rules of Business, 1973.

Accordingly, the Cabinet Division sought the decision of the Federal Cabinet on the summary submitted by the Petroleum Division, regarding "North-South Gas Pipeline (NSGP) Project-approval of protocol on the amendments in the Inter-Governmental Agreement between Governments of Pakistan and the Russian Federation ".

Ministry of Energy (Petroleum Division) stated that they had submitted the implementation status of the North-South Gas Pipeline (NSGP) project in light of the Supreme Court of Pakistan’s (SCP’s) judgment of August 13, 2020, to the Cabinet Committee on Energy (CCoE). In its response, CCoE directed the Petroleum Division to ensure that the timelines for the Project were strictly adhered to and that the Gas Infrastructure Development Cess (GIDC) was utilized for the project, in accordance with the directions of SCP.

The Inter-Governmental Agreement (IGA) for the project was signed with the Russian Federation (RF) on October 16, 2015. Progress on the project remained lackluster, as both sides could not agree on a sanction-free and commercially viable Russian project-implementing agency. The project could be self-financed by Pakistan, through GIDC. However, consultations made by the Petroleum Division with the stakeholders unequivocally indicate that the project is demonstrative of strategic engagement with the RF, which has also been endorsed by the Ministry of Foreign Affairs (MoFA).

In view of the SCP's decision, Petroleum Division proposed certain amendments in IGA to the RF regarding the project. The two sides also formed their respective Technical Committees to finalize the technical parameters of the project and negotiate the protocol on amendments to the IGA. The meetings of the Joint Russia – Pakistan Technical Committee (ITC) were held from 16-18 November 2020 in Islamabad and via videocon on various subsequent dates.

The JTC finalized the protocol on the amendments to the IGA, subject to approval from the respective governmental authorities.

Petroleum Division submitted the draft protocol on amendments in IGA to the Ministry of Law and Justice (MoL&J) for vetting. In response, MOL&J conveyed that the draft protocol was a policy document, negotiated and agreed by the respective Ministries of GoP and the RF and not a legal document or instrument. MoL&J was, therefore, unable to give its concurrence or vet it and advised Petroleum Division to proceed with the execution of the protocol on its own.

According to sources, in the meanwhile, MoE-PD was moving ahead with the project's implementation; the assignment account for the project had been opened and the GIDC Board had approved the release of sufficient funds to meet requirements for the current fiscal year.

The draft shareholders agreement had been prepared and shared with the Russian Federation (RF). Nespak was being engaged as Technical Consultant for the project for which necessary PPRA exemption was being sought. Moreover, the Government of Sindh had designated the Land Acquisition Collectors whereas; Government of Punjab was in the process of designating district-wise Land Acquisition Collectors.

After explaining the background, Petroleum Division sought approval of the Cabinet for draft protocol on the amendments to IGA between GoP and RF of October 16, 2015, in terms of Rule 16(1)(n) of the Rules of Business,


Copyright Business Recorder, 2021


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