Pakistan will receive an investment package from Russia amounting to US$14 billion for the energy sector including underground storage and offshore gas pipelines.
Vitaly A Markelov, state-owned Gazprom Management Committee Deputy Chairman, headed the Russian delegation who pledged to allocate US$14 billion for the cash-strapped country. From the US$14 billion, US$10 billion is allocated for an offshore gas pipeline project and the other US$2.5billion is for the North-South pipeline project while the remaining is allocated for building underground storage in Pakistan.
State-run entities of Pakistan and Russian signed an agreement for the conduct of the feasibility study for the US$10 billion offshore pipeline project which will run from Iran to Pakistan. The Russian’s huge investment in Pakistan is just in time for the two countries’ warming bilateral ties.
Ghulam Sarwar Khan, Pakistan Minister for Petroleum Division, appreciated the move of Russia to expand the bilateral relation of the two countries. He said that Gazprom’s interest in off-shore gas pipeline project is a manifestation of multifaceted cooperation between the two countries. The pipeline construction is expected to be completed in three to four years.
With Russia’s massive gas deposits in Iran, the country offered Pakistan and India gas exports through an offshore pipeline that will pass through the Gwadar Port on Arabian sea.
Despite US anger, the European bloc with Russia and European Union countries and Turkey continues to make imports to meet the domestic demands.
Turkmenistan provides gas to Moscow which will be exported to EU states. With its gas deposits in Iran, Russia can gain a foothold in the Pakistani Market. In return, Pakistan can benefit from transit fees during the project implementation.Furthermore, Pakistan would be brought on the world map as the transit country for offshore gas pipelines once the project is completed.
Mobin Saulat, Managing Director of Inter State Gas Systems (ISGS) and Markelov signed the agreement in which Russia will export 500 million cubic feet per day (mmcfd) to one billion cubic feet per day gas through a sea link to meet the growing demand of gas following industrialisation under the China-Pakistan Economic Corridor. An integrated approach will follow such as ancillary projects like underground gas storage, desalination and other power projects.
Gazprom will conduct the feasibility study at its own cost without financial implications on Pakistan