Pakistan and Russia Agree To Build Long Distance Natural Gas Pipeline

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Pakistan and Russia Agree To Build Long Distance Natural Gas Pipeline

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After a decade of protracted negotiations, Russia and Pakistan signed an Inter-Governmental Agreement yesterday on building a 1100-km natural gas pipeline from LNG terminals in southern Pakistan to growing domestic markets in the north. The construction is scheduled to be completed in late 2017.

In what seems to have all the hallmarks of a Build-Own-Transfer (BOT) project, an enterprise, set up by potential investors, will own and run the pipeline over 25 years, shipping 12.4 billion cubic meters of gas per annum, according to the statement.

A unit of Russia’s Rostec State Corp. will manage the project and invite foreign investors, including China, to participate.

Construction of the North-South pipeline brings trade and economic cooperation of Russia and Pakistan to a new level,” Russian Energy Minister Alexander Novak said in the statement. He and his Pakistani counterpart Shahid Khaqan Abbasi signed the accord in Islamabad in the presence of Prime Minister Nawaz Sharif, according to the statement.

Russia is studying funding from Russian and Chinese development banks for the link, the ministry in Moscow said without elaborating.

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