Russian authorities have appointed steel pipe suppliers to represent the country’s interests in a long-discussed project to build a new pipeline to transport imported regasified liquefied natural gas from Port Qasim near Karachi to Kasur in Punjab province in Pakistan.


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The move follows a decision from authorities to agree to last year’s proposal from Pakistani authorities to remove a subsidiary of Russian state-owned tech giant Rostec, which is under US and European sanctions, and also reduce the country’s controlling stake in the project to 26%.

Sanctions have been imposed on numerous Russian entities and individuals over the 2014 annexation of the Crimea Peninsula from Ukraine.

According to a Krelmin decision, this stake will go to a special purpose vehicle (SPV) that was founded by three firms — Tsentr Ekspluatatsionnykh Uslug, Eurasian Pipeline Consortium and Trubnaya Metallurgicheskaya.

While Tsentr Ekspluatatsionnykh Uslug is owned by the government and is managed by the country’s Energy Ministry, the other two founders are privately owned firms.

According to reports in Moscow, Eurasian Pipeline Consortium is controlled by Russian businessman Arkady Karmanov.

Karmanov is a member of a Judo club in St Petersburg that used to be attended by Russian President Vladimir Putin and his two friends Arkady Rotenberg and Gennady Timchenko, who themselves became businessmen during Putin's presidency.

Despite having no pipe manufacturing capacities, Eurasian Pipeline Consortium has grown as a major pipe supplier to state-controlled gas monopoly Gazprom and other Russian oil and gas players.

Trubnaya Metallurgicheskaya company, or TMK, is a major Russian pipe manufacturer that is controlled by Dmitry Pumpyansky, a Russian billionaire.

Russia signed an agreement with Pakistan to build the so-called North-South gas pipeline in 2015, initially agreeing to finance up to 85% of its estimated cost of over $2 billion and also operate the pipeline for 25 years after it is commissioned.

However, the start of the construction was repeatedly delayed, as both sides continued to argue over terms of the project, finally agreeing to give more control to local companies and rename the project to Pakistan Stream at the end of 2020.

Pakistan’s 74% shareholding in the project will now be shared between the country’s Sui Gas and Sui Northern companies. Shareholders will finance the project based on the size of their stakes, however, committing to buy as much as possible Russian materials and services.

Construction of the pipeline is now expected to begin in July this year. Throughput capacity could range from 1.6 billion cubic feet per day to upwards of 2 Bcfd as Russia is understood to be insisting on using pipes of higher diametre.