Pakistan to Sign $2.5 Billion Gas Project With Russia

Pakistan and Russia will sign the draft shareholders agreement of the $2.5 billion worth Pakistan Stream Gas Pipeline Project (PSGP) by February 15, 2022.

Both sides have also made major breakthroughs while agreeing to open air corridor, streamlining banking channels and reviewing customs tariff structure.

This was stated by Minister for Economic Affairs Omar Ayub Khan while briefing the National Assembly Standing Committee on Economic Affairs Division. The committee met with Mir Khan Muhammad Jamali in the chair on Monday.

The committee was informed that Russia has shown unprecedented interest in making investments in Pakistan by laying Pakistan Stream Pipeline, establishing banking channels to enhance mutual trade, starting direct flights between Russia-Pakistan and increasing scholarships quota for Pakistani students in higher technical courses.

The minister said that both countries have held their 7th session of the Joint Inter-Governmental Commission last month where some major breakthroughs were made which would help in confidence-building in enhancing bilateral relations. He said that the shareholder agreement draft of PSGP would be finalized by February 15, 2022, after which the project would come into implementation. The project would be implemented through the Russia-government nominated private entity and government of Pakistan-owned public entity.

The minister said that Russia is using its own banking system while Pakistan is using the European banking system, however, Pakistan has shown interest in using their system which would help the business community.

He informed that Pakistan and Russia currently have no direct flight operations, however, now both sides agreed to enhance cooperation in this regard. The Russian government has further agreed to increase the number of scholarships in different fields. The minister said that Russia has also shown interest to invest in Pakistan Railways. He further said that both sides have also agreed to cooperate on customs tariff structure.

During the discussion on ongoing negotiations for economic cooperation with other countries, the committee was told that several projects worth billions of rupees will be carried out as a result of negotiations with the European Union (EU), Uzbekistan, Bahrain, Kazakhstan, Germany, Russia and Azerbaijan.

Replying to a question regarding the oil facility from Saudi Arabia, the minister said that it is available immediately and Pakistan State Oil (PSO) could avail it. He said that an oil facility of $100 million per month is available. Further, the International Islamic Trade Finance Corporation (ITFC) facility of $762 million is also available and around 25 present is being currently utilized. The committee was also informed that Korean Exim Bank has increased the annual commitment for Pakistan from $500 million to one billion dollars.

The committee while appreciating the efforts of the Economic Affairs Division (EAD), also expressed concern over non-accomplishment of the projects in time. The committee directed the EAD to provide details of agreements signed between the Saudi Government in the next meeting.

The meeting was attended by lawmakers Fakhar Zaman, Ali Zahid, Syed Javed Husnain, Qaiser Ahmed Sheikh, Salahuddin, Muhammad Aslam Khan, Dr. Aisha Ghous Pasha, Shahida Akhtar Ali, Shaheen Naz Saifullah, Aliya Hamza Malik and Dr. Seemi Bokhari. The senior officers from EAD and the Ministry of Interior were also present in the meeting.

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