- Energy minister says govt 'moving fast', new terminals to have no take or pay liability
Minister for Energy Hammad Azhar said on Saturday that the government is "moving fast" on finalising details of the Pakistan-Stream Gas Pipeline (PSGP) project, formerly called the North-South pipeline, with Russian counterparts.
The minister shared the development in a tweet post, saying that the government has facilitated the allocation of pipeline capacity firm offer to two upcoming terminals. “The new terminals will have no take or pay liability on the government like previous terminals and will be based on B2B models,” informed Azhar.
The minister added that these measures will enhance the capability of the system to handle imported gas but in a “cost-efficient manner.”
Back in July, after days of negotiations, Pakistan and Russia signed Heads of Terms to construct the $2.5 billion Pakistan-Stream Gas Pipeline (PSGP) project of 1,040 kilometers from Port Qasim to Kasur, to be completed by 2023.
The infrastructure of the 42-to-56 diameter pipeline, costing $2.25 -2.5 billion, will ensure the enhanced energy security of Pakistan.
The project will secure sustainable gas supply infrastructure for the next 40 years. This will be the most essential conduit between the installation of new LNG terminals and the industrial growth of Pakistan. Oil and Gas Regulatory Authority (Ogra) will determine the tariff of gas pipelines. The raw material of the pipeline will come from Russia whereas local companies will lay the pipeline.
The Pakistan Stream Gas Pipeline Project was announced in a joint statement of the Pakistan-Russia Inter-Governmental Commission on November 26-28, 2014.
The federal cabinet approved the Protocol to IGA on March 9, 2021. Amended IGA was signed on May 28, 2021, whereas the original IGA was signed on October 16, 2015. According to the IGA, Pakistan-nominated entity, Inter-State Gas System, will undertake the project through GIDC proceeds of (74%) and external equity (26%).