PT Global Resources, a subsidiary of Rostec, has commenced discussions with Pakistani side regarding commercial aspects of the North-South Gas Pipeline construction project in the South Asian nation.
During the negotiations, the parties will pay special attention to the tariff for pumping gas, as well as other commercial operating conditions affecting the project's economics, PT Global Resources said on Thursday. On the Pakistani side, the talks will be attended by the Pakistani nominated company ISGS and the tariff committee specifically established by the government of Pakistan for negotiations on the project.
“This new round of talks aims to conclude the negotiation stage and allow the parties to sign a document enshrining the fundamental conditions of the project. This will make possible preparations for the signing of main commercial agreements on the construction of the North-South gas pipeline by October 16, 2016, in accordance with the schedule specified in the intergovernmental agreement,” the Russian firm stated.
Pakistan's Economic Coordination Committee (ECC) has agreed the creation of an SPV (Special Purpose Vehicle) in Pakistan, the responsibilities of which will include responsibility for implementing the project, that meets the parameters of the intergovernmental agreement.
The ECC has taken a decision to implement the project on BOOT (Build, Own, Operate, Transfer) contract terms, under which the constructed gas pipeline after its commissioning will be owned and operated by the project company for 25 years and then transferred over to the Pakistani side.
In October 2015 in Islamabad, an intergovernmental agreement was signed between the governments of Russia and Pakistan on the construction of the North-South gas pipeline from Karachi to Lahore. The pipeline will have a length of 1,100 km and a capacity of up to 12.3 bcm a year. It will connect LNG terminals in the ports of Karachi and Gwadar in southern Pakistan with power plants and industrial gas consumers in Lahore in the north of the country.
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