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Islamabad-Pakistan has approved in principle the structure recommended by two Russian companies Eurasian Pipeline Consortium and Federal State Unitary Enterprise (FSUE) for the construction of $2 billion North-South Gas Pipeline.

In 7th JCC session on the North South Gas Pipeline it was also decided to sign the commercial agreement for the pipeline by April 2020 while the ground breaking of the project to be held in June or July this year, official source told The Nation.

The 7th JCC session on the North South Gas Pipeline held here Tuesday between Pakistan and Russia. In the JCC Russian delegation was headed by Russia’s Deputy Energy Minister, Anatoli Tikhinov while Pakistan’s side was headed by Petroleum Division Secretary Asad Hayaud Din. The officials of both the ISGL and Russian JV were also present in the meeting.

The source said that during the meeting Pakistan in principle approved the Russian Joint Venture consist of Eurasian Pipeline Consortium and Federal State Unitary Enterprise (FSUE). It was also decided that Pakistan will get the opinion from the Law division within one month which will be followed by the pricing and commercial agreement of the project. A protocol in this regard has also been signed.

As per the details in 2015 Pakistan and Russian government had signed an agreement for laying a pipeline for the transportation of RLNG from Karachi to Lahore, called the North-South pipeline. The Russian government had nominated RT Global Resources for the North South project and the completion time for the project was 2017.Since ROSTEC the mother company of RT Global was facing US sanctions therefore Pakistan had asked Russian to provide sanction free company for the execution of the project. Following Pakistan’s request Russia had provided new consortium including TMK and JSC Zarubezhneft for the execution of the project, source said.

The Petroleum Division had asked for law division for the clearance of the consortium, however clearance was not issued and instead the petroleum division was asked to get the opinion of an American firm as the owner of one of the company was on US sanctions watch list. Meanwhile, the secretary Petroleum Division Asad Hayaud Din had written a letter to Russia and asked them to provide a sanction free consortium or Joint Venture as Ultimate Beneficial Owner of one of the the Russian company was on sanction Watch list. Following Pakistan’s request Russia had once again provided another new Joint Venture consist of Eurasian Pipeline Consortium and Federal State Unitary Enterprise (FSUE).

A protocol has been signed and the commercial agreement will be signed between Pakistan’s Inter State Gas Limited and Russian Joint Venture in April. The pipeline will be laid on build, operate and transfer basis and will have the capacity to transport 1.2 bcfd RLNG from two existing LNG terminals.