Pakistan Stream estimated at $1.5-2 bln, Russian companies could invest up to 25% in project - Energy Ministry
NOVOKUZNETSK. June 1 (Interfax) - The cost of the Pakistan Stream gas pipeline could total $1.5-2 billion, Deputy Russian Energy Minister Anatoly Yanovsky told reporters in Novokuznetsk on Tuesday.
"I think $1.5-2 billion, definitely no less," Yanovsky said.
"The [pipeline's] route is unchanged; front-end engineering and design is being carried out. Now, there is a line on the map, but it needs to be fixed to localities," he said.
Yanovsky recalled that three Russian companies had agreed to participate in the project: Eurasian Pipeline Consortium (ETK), TMK , and federal state unitary enterprise Operating Services Center, which the Russian Energy Ministry coordinates. He said these must found an organization in Russia that would create a special purpose vehicle (SPV) together with a Pakistani company for the object's construction.
"The companies on our side are all well fixed. All the financing schemes will be set out in the agreement," Yanovsky said.
He said the Pakistani side had 75% of the funds to finance the gas pipeline. "If that's how it turns out, the Russian companies will undertake to pay 25%. If it doesn't happen, they'll negotiate," Yanovsky said.
As reported earlier, Russia and Pakistan signed a document in May enabling them to start practically implementing construction of the Pakistan Stream, formerly North-South, gas pipeline in the near future.
Russia and Pakistan in 2015 signed an intergovernmental agreement on construction of the North-South gas pipeline from Karachi to Lahore. The 1,100-km pipeline will be capable of carrying 12.3 billion cubic meters of gas per year. It is supposed to link liquefied natural gas (LNG) receiving terminals in the ports of Karachi and Gwadar in southern Pakistan with power plants and industrial gas consumers in Lahore in the north of the country.