12/1/2016

NorthSouthpipeline:Pakistan,RussiareachLNGpriceaccordTheExpressTribune

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NorthSouthpipeline:Pakistan,RussiareachLNGpriceaccord
MoscowwillsupplygasfromKarachitoLahoreat85centspermmbtu
ByZafarBhutta
Published:December1,2016

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ISLAMABAD:PakistanandRussiahaveagreedonthepriceforthe$2billionNorthSouthpipelinethatwillpumpimported
liquefiednaturalgas(LNG)fromKarachitoLahoretosatisfygrowingenergyneedsofPunjab.Theywillsignacommercial
contractsoon.
TheForeignOfficeplayedakeyroleinfinalisingthegaspricewithRussiaaheadofBricssummitinOctoberinordertomuster
MoscowssupportagainstIndianinfluence,anofficialtoldTheExpressTribune.
Pakistan,Russiameettodaytodiscuss$2bLNGproject
IndiahasabandonedRussiaandgoneintotheUScamp,promptingPakistantoforgestrongtieswithMoscowforgainingvital
supportattheinternationallevel.
InamajorfriendlygesturetoPakistan,RussianPresidentVladimirPutinhasnotendorsedIndianPrimeMinisterNarendra
ModisstanceaccusingIslamabadofsponsoringterrorism.
Accordingtoofficialsawareofthedevelopment,theNorthSouthpipelinewillbethefirstmajorRussianinvestmentinPakistan
afterdecades.Earlier,RussiahadassistedPakistanslargesthydrocarbonexplorerOilandGasDevelopmentCompany(OGDC)
insearchforenergyresources.
BeforetheagreementonLNGprice,theEconomicCoordinationCommittee(ECC)hadapprovedtheconstitutionofaprice
negotiatingcommitteetofinalisethemultibilliondollargasimportcontractwithRussia.
RussiaisabigexporterofgastoEurope,buttheUSislobbyingtodriveawayMoscowfromthismarket.Washingtonsbackingof
theTurkmenistan,Afghanistan,PakistanandIndia(Tapi)gaspipelineprojectisalsopartofthatmovetocaptureenergymarkets
ofAfghanistan,PakistanandIndia.
RussiagetsmajorsuppliesofgasfromTurkmenistanandexportsittoEurope.
RussianinvestmentintheLNGpipelinewillopenmoreavenuesforinvestmentintheenergysector,theofficialsaid,addingit
wasalsointerestedinoilandgasexplorationinPakistan.
Pakistanawards$2billionLNGpipelinecontracttosanctionhitRussianfirm
PowerproductionisanotherareawhereMoscowhasexpressedinterestandithasevenofferedelectricityexporttoPakistan.
RussiawillbuildtheNorthSouthgaspipelineandchargeatollingfeeforLNGsupplyfromKarachitoLahore.

http://tribune.com.pk/story/1249730/northsouthpipelinepakistanrussiareachlngpriceaccord/

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12/1/2016

NorthSouthpipeline:Pakistan,RussiareachLNGpriceaccordTheExpressTribune

Accordingtotheofficial,ithaddemandedafeeof$1.2permillionBritishthermalunits(mmbtu)forgassupply.However,the
negotiatingcommitteeagreedonafeeof85centspermmbtu.
ItistheidealrateforgastransmissionRussiawillpourcapitaltobuildthepipeline,theofficialsaid.
Atpresent,PakistanisimportingLNGfromQatarandlocalgasutilitiesarepaidatotalof85centspermmbtuforgas
transmissionthroughtheirpipelinenetworks.ThefeeagreedwithRussiaisequaltothefeebeingchargedbythegasutilities.
Earlier,RussiancompanyRTGlobal,onwhichtheUShadimposedsanctions,wasdesignatedtoimplementtheLNGpipeline
projectinPakistan.
However,inarevisedplan,RussiawillgetaspecialpurposevehicleregisteredinPakistan.Thiswillbealocalcompanythatwill
dealwiththepipelineproject.
Thestephasapparentlybeentakenasaprecaution,thoughtheMinistryofLawisoftheviewthatRTGlobalcouldworkin
PakistanascompaniesfacingUSsanctionscouldnotdotransactionsonlywithUSfinancialinstitutions.Theyarenotbarredfrom
workinginothercountries.
PublishedinTheExpressTribune,December1st,2016.
LikeBusinessonFacebook,follow@TribuneBizonTwittertostayinformedandjoinintheconversation.

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