ISLAMABAD: Russia beset by sanctions, struggles to implement $2 billion North-South gas pipeline in Pakistan, a benefactor in shape of Shanghai-based Silk Road Fund has committed to provide financing for this project.
Heartened by this commitment, Pakistan and Russia will sign a deal project implementation deal on December 21st, reported Express Tribune.
Pakistan and Russia in October 2015 had reached an agreement to build the North-Sea gas pipeline, which would transmit Liquefied Natural Gas (LNG) from Karachi to Lahore for meeting fuel requirements of power plants.
Russia was originally supposed to provide $2 billion of financing for this pipeline, and Pakistan equity share in this project would have been 15 percent and 85 percent was to be provided by state-owned company, RT Global Resources.
RT Global Resources was originally supposed to sign an agreement with Pakistan Inter State Gas Systems (PISGS). Due to US-led sanctions, the project was marred by delays and funding problems.
As major impediment in initiation of project has been removed, Chinese entities would become partners in constructing the pipeline of 1,100 km having transmission capacity of 1.2 billion cubic feet per day.
Pakistan will get control of the pipeline after twenty-five years and it will be established on the build, operate and transfer model.
The official said, Chinese entities were eager to get a share in North-Sea pipeline by providing funding via Silk Road Fund. This development arose when a Chinese company failed to get a contract for LNG Gwadar pipeline and terminal contract, which was shelved by Pakistan at behest of Saudi pressure due to its tense relations with Qatar.