Russia agrees to build Pakistan gas line from LNG terminals

By ELENA MAZNEVA
Bloomberg

Russia agreed to build and possibly run a planned natural gas link in Pakistan as President Vladimir Putin seeks to bolster the country’s influence in the Middle East and Asia.

The countries signed an intergovernmental agreement for a pipeline that would connect liquefied natural gas (LNG) terminals in southern Pakistan and its energy-hungry north, with construction to be completed by late 2017, Pakistan’s Petroleum Ministry said in a statement Friday.

The line will reach its project capacity by early 2020, Russia’s Energy Ministry said in a separate statement. A unit of Russia’s Rostec State Corp. will manage the project and invite foreign investors, including China, to participate.

Putin is seeking allies in Asia and the Middle East in an effort to break out of international isolation caused by the Ukrainian crisis, while Russia’s military build up in Syria has contributed to tensions, especially with the US.

The deal with Pakistan comes after more than a decade of talks about gas-pipeline projects.

“Construction of the North-South pipeline brings trade and economic cooperation of Russia and Pakistan to a new level,” Russian Energy Minister Alexander Novak said in the statement. He and his Pakistani counterpart Shahid Khaqan Abbasi signed the accord in Islamabad in the presence of Prime Minister Nawaz Sharif, according to the statement.

Russia is studying funding from Russian and Chinese development banks for the link, the ministry in Moscow said without elaborating. A project company, set up by potential investors, will own and run the 1,100 kilometer (684 mile) pipeline over 25 years, according to the statement.

The link would ship as much as 12.4 billion cubic meters/year of gas, which is about 30% of Pakistan’s current consumption.

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