Pakistan signs offshore pipeline agreement with Gazprom
11 Feb 2019
Pakistan has signed a memorandum of understanding (MoU) with Russian energy giant Gazprom on a feasibility study for an offshore pipeline that would supply natural gas from the Middle East to Pakistan and other parts of South Asia.
“(The agreement) provides for a joint feasibility study regarding gas supplies from the Middle East to South Asian countries,” Gazprom said in a statement on Wednesday, without specifically mentioning Iran or India.
The MoU was signed during a visit by a Gazprom delegation headed by Vitaly Markelov, deputy chairman of the Gazprom Management Committee, to the Islamic Republic of Pakistan last week.
Vitaly Markelov and Mobin Saulat, managing director of Pakistan’s Inter State Gas Systems (Private) Ltd, signed the Memorandum of Understanding.
Russia’s ministry of energy and the Pakistan’s ministry of energy had in September 2018 inked an MoU that provides for a joint feasibility study regarding gas supplies from the Middle East to South Asian countries.
Pakistani officials had earlier discussed an offshore pipeline from Iran, but its viability is in doubt due to the delicate geopolitical situation in South Asia and Pakistan’s rivalry with India and US sanctions against Iran.
The offshore pipeline from Iran to Pakistan and India was set to cost an estimated $10 billion, according to Pakistani media.
Pakistan’s petroleum ministry said it would take three to four years to complete the pipeline, which would include “other ancillary projects such as underground gas storage, desalination and other power projects.”
Pakistan will import some 500 million to 1 billion cubic feet of gas a day from Middle East sources as per the agreement signed with Gazprom, the ministry said.
Islamabad previously signed an intergovernmental agreement with Russia to discuss the import of liquefied natural gas (LNG) to Pakistan, but the proposal for a $2 billion North-South pipeline to deliver gas from Pakistan’s coastal regions to industrial areas in the north has been held up since 2015 due to a disagreement over fees and US sanctions against Russian state conglomerate Rostec.
Inter State Gas Systems (Private) Ltd, a subsidiary of Government Holdings Private Limited (GHPL), operates under the petroleum division of Pakistan’s ministry of energy and implements strategic infrastructure projects in the gas sector.