ISLAMABAD: Negotiations on the Pakistan Stream Gas Pipeline (PSGP) Project (PSGP) have started between senior officials of a Russian company and high ups of Pakistan to finalize agreement for the construction of PSGP Project, it was learnt on Monday.
According to sources, negotiations on the PSGP project started on Monday between high ups of Pakistan and officials of Russian company named as ETK in the federal capital whereas the final decision, regarding whether the project’s construction will be carried out by a russian company at an estimated cost of $2.5 billion or by Pakistani companies at an approximate low cost of $1.6 billion, is likely during the next week.
As per details, the Russian delegation comprising twelve members has arrived in Pakistan to negotiate the Head of Terms, shareholders agreement, and other corporate documents with the Technical Committee constituted by the government for the project. The negotiations will continue till July 15.
The Russian delegation comprises A.A.Tolpatov, Deputy Director of Department of Foreign Economic Cooperation and Fuel Markets Development, V.I. Sheherbatykh, General Director, A.I.Rubtsov, General Director Advisor, Yousef Asif, Deputy General Director, A.V. Bolshakov, Deputy Chairman, I.L.Perstrikov, Deputy Chairman, E.V. Bulgakova, Deputry Chairman, V.V.Shmatovich, Vice President, V.A. Romanov, Deputy Project Director, A.V.Saraykin, Legal Counsel, B.B.Neimerovrts, Deputy Finance Director, A.R. Bargulakov, Project Technical Director.
On Pakistan’s side, Secretary to the Attorney General for Pakistan, Secretaries of Finance, Law and Justice Division, Director General (Gas &LGs) of Policy Wing, petroleum division, Managing Director of Government Holdings (Pvt.) Limited (GHPL), and Inter State Gas Systems (Pvt.) Limited (ISGS), Head of Technical, Finance and Legal ISGSL and Company Secretary, ISGSL of petroleum division are part of a team.
“Despite the reservation raised by Special Assistant to Prime Minister (SAPM) on Petroleum and Power Tabish Gauhar and the Cabinet Committee on Energy to explore alternate options to materialise the project, a high level Russian delegation has arrived to finalise the agreement,” said sources.
Earlier last month, owing to the heavy cost estimation of the project, the Cabinet Committee on Energy (CCoE) had advised to explore alternate options. CCoE while considering a summary dated June 23 submitted by the Petroleum Division observed that there are massive negative consequences of the delays in the implementation of this project and the deadline set by the Supreme Court of Pakistan has been missed with no imminent possibility of start of work. Therefore, an alternate plan needs to be finalised as soon as possible, but not later than mid-July 2021.
Sources said that the PSGP is likely to be constructed with Russian cooperation under which Pakistan will give 70 percent of the total estimated cost of $2.5 billion to North-South Gas Pipeline while Russia will offer 30pc of this total cost of this pipeline project.
It is pertinent to mention here that the delay in the construction and heavy cost estimation have already put an additional burden on the national exchequer.
“Under this project, 1.2 billion cubic feet of imported gas per day will be supplied from Karachi to Lahore mainly to avoid energy shortage,” said the sources.
It is pertinent to mention here that state owned sui companies and local companies may construct the gas pipeline. Former Additional Secretary Petroleum Division Ayub Chaudhry was in favour of construction by Pakistani companies.
He was of the view that Pakistani companies- Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) have already constructed South North Gas Pipeline for Liquefied Natural Gas (LNG) and can do the work at a lower cost.
Despite efforts, Secretary Petroleum was not available for an official statement regarding meetings with senior officials of the Russian company and plans for the PSGP.
