Pakistan and Russia officials sign ‘Head of Terms’ for PakStream Gas Pipeline project
Deal envisages 74 percent shareholding for Islamabad and 26 percent for Moscow for the 56-inch pipeline connecting Port Qasim to Lahore
Pakistan and Russia on Thursday completed negotiations on the construction of a 1,100km gas pipeline connecting Karachi’s Port Qasim to Lahore and inked an agreement regarding its terms.
“After lengthy deliberations, Government of Pakistan and Russia have agreed upon and signed ‘Head of Terms’ for construction of PakStream Gas Pipeline,” announced Energy Minister Hammad Azhar in a posting on Twitter. “Shareholding and corporate structure finalized. The project has been suffering from delays since 2015 but effective progress made today,” he added.
A 12-member Russian delegation arrived in Islamabad on Monday for talks on the pipeline, with Moscow’s Pakstream Limited negotiating with Pakistan’s Inter-State Gas System on the terms of the deal.
The pipeline project, estimated to cost $2.5-3 billion and scheduled for completion by the end of 2023, would comprise 74 percent shareholding of Pakistan and 26 percent for Russia. The Russian side also has the option to abandon the project if it feels it is not feasible; or expand its shareholding to 49 percent if it can provide financing arrangements acceptable to Pakistan.
According to the agreement, which would remain in effect for 25-30 years, Russia would arrange financing for the project’s foreign exchange component through suppliers’ credit or similar measures to cover imported items like steel, consultants, pipelines and related products and materials not available in Pakistan. There is no throughput guarantee—the amount of gas a customer is required to transport annually—but tariff payments and returns to Russian entities would be ensured through a security package and standby letters of credit in line with those already available to all international investors.
The agreement also details the pipeline specifications, including a diameter of 56 inches that would be able to provide 700-800 million cubic feet per day of gas flow, with potential of a boosting this to 2,000mmcfd with compressors.
According to the terms, Pakistan’s Sui Gas companies would be responsible for all post-construction operations and maintenance.
According to officials, the two sides must still ink a shareholders’ agreement; a financial agreement; gas transportation agreement; and lenders’ agreement. Russia must also complete the front end engineering design, while Pakistan needs to arrange financing.
The intergovernmental agreement of the PakStream project was signed in 2015 but has faced numerous delays, partially linked to U.S. sanctions. An amended agreement, reflecting the utilization of Gas Infrastructure Development Cess, was signed in May to commence construction work on project.
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The Pakistan Gas Stream, is the revolution
In Step 1 – Putin is preparing the stage to exit the EU Gas market and pushing the EU to expensive LNG and billions in LNG infra ! That will raise the cost of manufacturing and cost of living in EU and thus the inflation in EU.Hence,EU will NO LONGER be an export hub to PRC and Euro will depreciate SEVERAL EU INDUSTRIES WHICH USE GAS AS AN INPUT (FEEDSTOCK OR FOR POWER – BEYOND A %),WILL CEASE TO EXIT.
In Step 2 – The Gas not sold to EU,will be sold,via many streams – like the Pakistan Stream, to “LOW COST NATIONS”, where lower GAS COSTS = REVOLUTION,like in Pakistan ! Pipeline Gas, will crash the cost of Power, and also ,the cost of Industrial manufacturing = lower imports and a quantum leap in exports = NO CAD and PKR appreciation. In addition, several NEW INDUSTRIES,WHICH USE GAS AS FEEDSTOCK,WILL COME UP.
In one stroke,Putin has crashed,Pakistan’s cost of manufacture, and make EU manufacturing unviable
In Step 3 – Putin will use Pakistan to export to EU,,products which ARE UNVIABLE TO MAKE IN EU or TOO COSTLY (due to the RUSSIAN EXIT FROM THE EU GAS MARKET).This is Genius !So Putin, 1st destroys EU manufacturing,raises EU inflation and THEN GETS NATIONS LIKE PAKISTAN TO EXPORT TO THE EU – to offset the EU lack of competitiveness !
Let us call this VALUE ADDED GAS SERVICES and tapping into the Gas Value addition Value Chain
In Step 4 – Putin will get PRC to invest in Mega Billion USD SEZ in Pakistan – TO USE RUSSIAN GAS,CHINESE MONEY,CHINESE TECHNOLOGY,PAKISTAN MANPOWER AND PAKISTAN’s GEOGRAPHICAL POSITION, TO SET UP INDUSTRIES,WHICH ARE GAS GUZZLERS ,FOR EXPORTS, TO THE WHOLE WORLD – ESPECIALLY,THE EU. Russia and PRC will be investors in these industries,in part,and will use the profit streams to invest in the Pakistan Coal and Minerals sector, for conversion to power,and metal smelters.
In Step 5 – .No nation has more skill in metal smelting than Russia, & no nation has more need for Metals – than PRC.That makes the Gas,Minerals & Metals, a perfect mix.The House of Saud, is already investing Billions in Pakistan Oil – & will invest even MORE with the Russian-China-Pakistan triad – to make a Quad,right next to India !
In Step 6 – The industrial revolution will begin in Afghanistan – with the Gas Pipeline & the minerals, will be extracted on a massive scale, for conversion,at the nearest logistics point,which is Pakistan (in the short term) – also because,Pakistan has a deep draft port for export !
In Step 7 – The Indians will try to scuttle the gas grid,with the Americans – in Afghanistan or Kaza or Uzbek or EVEN in Pakistan.That will place Pakistan-PRC-Russia-Afghanistan-Kaza-Uzbek ,into a security grid,with billions pumped into Pakistan ,for Missile tech,ADS, Navy & Airforce,by Russia &China.
In Step 8 – That leaves out ,ONLY FOOD ! Hence, PRC & Russia – who are the best water and dam experts in the world – will get water into Balochistan & other parts of Pakistan, by making dams & canals,to use the fertile lands of Pakistan to feed Russia,PRC & the Central Asian republics.Consistent water supply & low cost power,can cause an AGRI REVOLUTION ,w/o any peer in the world.No other nation or geography has that much potential.(and Baloch has Gwadar,,for exports)
From Peter the Great,to Putin the Divine !
Many opined about this TRIAD of PRC-Russia-Pakistan – but only 1 man,saw it,a long time ago,when it was considered, a crazed rhapsody.Lt Gen Hamid Gul ! Time for Pakistan to exit the Axis of the USA.dindooohindoo
A NWO has been born,with the Russian Octopus,which has the brain & body of PRC-Russia, tentacles (like gas pipelines) and each tentacle is REVOLUTIONISING NATIONS LIKE PAKISTAN ! It will also provide a no-war guarantee from the Indian weasels,as the India-US axis will not attack Russian and Chinese Assets inside Pakistan
Thiis is the Model for a Win-Win Partnership by Russia and PRC all over the world.
Jiye Jiye Pakistan !