North-South Gas Pipeline: parties evaluating contract models

The government hoped that the commercial negotiations of North-South Gas Pipeline project are expected to take place in coming three to four months as parties are presently evaluating the contract models. Sources said parties are also evaluating the contract models as well as structure of the project including financing issues, issuance of sovereign guarantee for gas volume off-take (1.2 bcfd) as well as other implementation issues for which necessary approvals are being sought from Economic Co-ordination Committee (ECC) of the Cabinet.
A government-to-government agreement between the Russian Federation and the Islamic Republic of Pakistan on co-operation for the development of the North-South Gas Pipeline Project was signed on October 16, 2015. Pakistan has designated Inter State Gas System (Private) Limited as the executing agency to implement the project in liaison with Sui Northern Gas Pipeline Limited (SNGPL) and Sui Southern Gas Company Limited (SSGC) while Russia has nominated "RT-Global Resources" (RT-GR) to implement the project. Both the nominated entities will enter into commercial arrangement on mutually agreed terms.
The respective nominated entities have been mandated to define the technical and economic parameters of the project, enter into contractual arrangement within 12 months from the signing of the G-to-G agreement and take all necessary steps required to enter into contractual arrangements.
Pursuant to the signing of a government-to-government agreement, the techno-commercial negotiations between the nominated entities RT-GR and ISGS have been initiated. The preliminary reconnaissance of the proposed route corridor has been carried out and a couple of negotiations rounds have been held between the nominated entities encompassing issues pertaining to the project implementation. The commercial negotiations are expected to take 3 to 4 months.
The project will be capable of transporting 1.2 bcfd of gas from Karachi to Lahore by laying 42" diameter 1100 km pipeline system. Sources maintained that the Project will not only help transport RLNG but also give transport capabilities for the Iran-Pakistan and TAPI gas pipeline projects which are expected to come on line in the next 3 to 5 years.