Energy-hungry Pakistan is progressing with a $2 billion-plus major new pipeline to transport imported regasified liquefied natural gas from Port Qasim near Karachi to Kasur in Punjab province.

Russia will have a 26% minority stake in the Pakistan Stream Gas Pipeline after an amendment last week to a 2015 agreement in which Russia was to have built the pipeline with 100% project financing.

The 1122-kilometre, high-pressure pipeline will be constructed and operated by a joint venture company with representation from both sides.

Front-end engineering and design work will be tendered to a third-party contractor to determine whether the trunkline should be of 48-inch or 56-inch diameter, according to local media reports.

Also to be decided is the throughput capacity, which could range from 1.6 billion cubic feet per day to upwards of 2 Bcfd.

Pakistan’s state-owned gas companies Sui Northern and Sui Gas will be tasked with laying the gas pipeline, while Russia will be supplying the pipe, compressors and some other key equipment.

The project also aims to enhance the technical and operational capacity of Pakistani companies and human resources through collaborative working and training.

Regasified volumes sent through the pipeline will be destined for industrial and domestic customers.

Pakistan is becoming increasingly dependent on imported LNG as indigenous gas production meets less than 40% of current demand.

The original agreement envisaged Russia constructing the pipeline on a build, own, operate and transfer basis and then transferring ownership to Pakistan after 25 years. This model would have seen Russia required to stump up 85% of the project cost.

Russia was earlier offered 49% equity in the then-known North South Gas Pipeline project, but it has now elected to take a 26% interest.

LNG

Pakistan moves on major LNG pipeline with Russia in tow