The Pakistan Stream would be the biggest infrastructure deal with Russia since the early 1970s, when the Soviet Union set up the Pakistan Steel Mills industrial complex at Port Qasim, near Karachi.
Back in 2015, Russia and Pakistan came to an intergovernmental agreement to build a North-South pipeline, which will transport imported regasified LNG from Port Qasim near Karachi to Kasur in Punjab province in Pakistan.
In line with the project, the 1,100-km-long pipeline will have a capacity to pump 12.4 billion m3 of gas annually.
The parties were to sign commercial agreements in 2016, and the facility was planned to be commissioned by 2018, but the terms of the project have been postponed several times.
Earlier, Russia with 85% cost sharing had to build the pipeline on the basis of build, own, operate and transfer model and transfer the ownership to Pakistan in 25 years.
Revision of the project came after a recent decision of the Supreme Court of Pakistan that made available the funds on account of Gas Infrastructure Development Cess (GIDC).
Therefore, the revised and renamed Pakistan Stream envisages 74% contribution of capital by Pakistan and 26% by Russia with estimated cost of $ 2.2 billion and transportation of 1.6 billion cubic feet gas per day.
Both sides have also agreed to execute the project through a special purpose company incorporated in Pakistan.
The Pakistan Stream to deliver gas from Pakistan’s coastal regions to industrial areas in the north has been held up since 2015 due to a disagreement over fees and United States sanctions against Russian state conglomerate Rostec.