Karmanov's ETK enters company created by TMK for involvement in Pakistan Stream with 50% stake
MOSCOW. June 17 (Interfax) - Alexander Karmanov's LLC Eurasian Pipeline Consortium (ETK) has entered the capital of LLC Pakstream, which TMK created for involvement in the project to build the Pakistan Stream gas pipeline.
ETK's stake in Pakstream is 50%, according to SPARK-Interfax data.
The CEO of Pakstream is Vladimir Shcherbatykh, who heads TMK's Middle Eastern subdivision.
In late May, Russian Energy Minister Nikolai Shulginov and Pakistan's ambassador to Russia, Shafqat Ali Khan, signed a document that will make it possible soon to begin practically implementing the project to build the Pakistan Stream gas pipeline. They signed a protocol to amend the October 16, 2015 intergovernmental agreement on cooperation in the implementation of the project to build the North-South gas pipeline, as it was formerly known.
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.
The agreement put the tentative cost of the project at $2.5 billion. The partner and client on the Pakistani side was supposed to be Inter State Gas Systems (ISGS), handling the supply of gas and paying for its transportation. It was reported earlier that Pakistan's government would issue a sovereign guarantee for payment of the transport rate and project financing.
In 2018, TMK founded the joint venture Oriental Stream (Private) Ltd together with Rosatom for the Pakistan pipeline project. The JV was registered in Karachi. TMK had a majority share package in the JV, while Rostec's was less than a blocking stake. An informed source told Interfax that at the end of 2019 "the negotiation process was stalled because of structure-related issues due to sectoral sanctions of one of the consortiums' participants."
This spring, it was reported that Russian state corporation Rostec had left the gas project in Pakistan. Now, in line with the protocol on amendments to the legal agreement between the two parties dated October 16, 2015, which was published in late March, the Russian Energy Ministry's Operating Services Center, ETK, and Dmitry Pumpyansky's TMK will form a new special purpose vehicle on the Russian side to replace Rostec's RT-Global Resources, which initially planned to participate in the project. It was assumed that Pakistan would hold a controlling interest In the SPV. The Russian stake in the project will be at least 26% and will be paid for either in cash or with products and services.