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Russia Provides Sanction-Free Structure Worth $2 Billion for North-South Gas Pipeline

Russia has finally provided Pakistan a sanction-free structure for the strategic North-South Gas Pipeline. The government is of the view that the construction work is likely to start somewhere in June-July this year with an estimated cost of over $2 billion.
The report stated that Pakistan has been seeking sanctions free-structure and pleading not to make ROSTEC, the mother company of the RT Global, part of the project as it is facing sanctions from Russia for a very long time.
Pakistan cannot afford to allow such companies to participate in the project at a time when the country is under the watchful eyes of FATF.
Now Russia has replaced the companies with a Joint Venture of LLCs Eurasian Pipeline Consortium and Federal State Unitary Enterprise (FSUE) ‘Centre of Operations Services’ of Russia’s Ministry of Energy. The official said that the project has been delayed by almost four years till now.
A senior official at Petroleum Division has confirmed that they have received a letter from Mr. Alexander Novak, Minister of Energy of The Russian Federation written on December 26, 2019. The letter informs about the replacement of the project company, giving the project’s realization rights for ‘North-South Gas Pipeline private Limited to a Joint Venture of LLC, Eurasian Pipeline Consortium and Federal State Unitary Enterprise (FSUE) ‘Centre of Operations Services’ of the Ministry of Energy of The Russian Federation,”
He further stated that:
Pakistan has asked Russia to initiate discussions on technical and commercial aspects of the project so that technical and commercial agreement could be concluded by March 2020 as suggested by the Russian side.
The official said that the letter from Mr. Novak is a major development, allowing Pakistan to go ahead with the North-South Gas Pipeline Project. It has allayed the main concern of Pakistan stressing for a sanction-free structure with relevant pipeline building experience of the companies involved.
It is pertinent to mention that the current gas infrastructure of Pakistan lacks the capacity to transport large volumes of gas from Southern to Northern regions of the country.
Keeping in view the expected additional gas supplies in the near future, the Ministry of Petroleum and Natural Resources has planned to undertake the “North-South Gas Pipeline Project” to lay down a pipeline from Karachi to Lahore.

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