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12/1/2016

North­South pipeline: Pakistan, Russia reach LNG price accord ­ The Express Tribune

Moscow will supply gas from Karachi to Lahore at 85 cents per mmbtu

ByZafarBhutta Published: December 1, 2016

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ISLAMABAD: PakistanandRussiahaveagreedonthepriceforthe$2­billionNorth­Southpipelinethatwillpumpimported liquefiednaturalgas(LNG)fromKarachitoLahoretosatisfygrowingenergyneedsofPunjab.Theywillsignacommercial contractsoon.

“TheForeignOfficeplayedakeyroleinfinalisingthegaspricewithRussiaaheadofBricssummitinOctoberinordertomuster

Moscow’ssupportagainstIndianinfluence,”anofficialtoldTheExpressTribune.

“IndiahasabandonedRussiaandgoneintotheUScamp,promptingPakistantoforgestrongtieswithMoscowforgainingvital

supportattheinternationallevel.”

InamajorfriendlygesturetoPakistan,RussianPresidentVladimirPutinhasnotendorsedIndianPrimeMinisterNarendra

Modi’sstanceaccusingIslamabadofsponsoringterrorism.

Accordingtoofficialsawareofthedevelopment,theNorth­SouthpipelinewillbethefirstmajorRussianinvestmentinPakistan

afterdecades.Earlier,RussiahadassistedPakistan’slargesthydrocarbonexplorerOilandGasDevelopmentCompany(OGDC)

insearchforenergyresources.

BeforetheagreementonLNGprice,theEconomicCoordinationCommittee(ECC)hadapprovedtheconstitutionofaprice

negotiatingcommitteetofinalisethemultibillion­dollargasimportcontractwithRussia.

RussiaisabigexporterofgastoEurope,buttheUSislobbyingtodriveawayMoscowfromthismarket.Washington’sbackingof

theTurkmenistan,Afghanistan,PakistanandIndia(Tapi)gaspipelineprojectisalsopartofthatmovetocaptureenergymarkets

ofAfghanistan,PakistanandIndia.

RussiagetsmajorsuppliesofgasfromTurkmenistanandexportsittoEurope.

“RussianinvestmentintheLNGpipelinewillopenmoreavenuesforinvestmentintheenergysector,”theofficialsaid,addingit

wasalsointerestedinoilandgasexplorationinPakistan.

PowerproductionisanotherareawhereMoscowhasexpressedinterestandithasevenofferedelectricityexporttoPakistan.

RussiawillbuildtheNorth­SouthgaspipelineandchargeatollingfeeforLNGsupplyfromKarachitoLahore.

12/1/2016

North­South pipeline: Pakistan, Russia reach LNG price accord ­ The Express Tribune

Accordingtotheofficial,ithaddemandedafeeof$1.2permillionBritishthermalunits(mmbtu)forgassupply.However,the

negotiatingcommitteeagreedonafeeof85centspermmbtu.

“Itistheidealrateforgastransmission;Russiawillpourcapitaltobuildthepipeline,”theofficialsaid.

Atpresent,PakistanisimportingLNGfromQatarandlocalgasutilitiesarepaidatotalof85centspermmbtuforgas

transmissionthroughtheirpipelinenetworks.ThefeeagreedwithRussiaisequaltothefeebeingchargedbythegasutilities.

Earlier,RussiancompanyRTGlobal,onwhichtheUShadimposedsanctions,wasdesignatedtoimplementtheLNGpipeline

projectinPakistan.

However,inarevisedplan,RussiawillgetaspecialpurposevehicleregisteredinPakistan.Thiswillbealocalcompanythatwill

dealwiththepipelineproject.

Thestephasapparentlybeentakenasaprecaution,thoughtheMinistryofLawisoftheviewthatRTGlobalcouldworkin

PakistanascompaniesfacingUSsanctionscouldnotdotransactionsonlywithUSfinancialinstitutions.Theyarenotbarredfrom

workinginothercountries.

PublishedinTheExpressTribune,December1 st ,2016.

LikeBusinessonFacebook,follow@TribuneBizonTwittertostayinformedandjoinintheconversation.

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