Russia Pakistan gas pipeline route: Putin’s key ally secured over £2.1 billion gas deal

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In recent decades, Russia has started to monopolise the natural gas industry in Europe, becoming the European Union’s (EU) largest source of the fuel. The Kremlin has made the provision of gas a priority to enable Russia’s influence to be exerted as far and wide as possible. Now, the country looks likely to be offered a lucrative contract to build a new pipeline in Pakistan.

What is Pakistan Stream?

The idea for the Pakistan Stream Gas Pipeline (PSGP) – formerly known as the North-South gas pipeline – was first proposed in 2015.

At 1,040km (646 miles) long, the project has been provisionally contracted by the Pakistani Government to be built by Russia.

The project was estimated to cost about $2.5 billion (£2.1 billion).

Pakistan Stream will not connect Russia and the Asian nation. There will be no direct pipeline linking the two countries who do not share a common border.

Initially, it was planned that the Russian side would own a controlling stake, assume 85 percent of the costs, and operate the gas pipeline for 25 years.

However, in the revised version of the deal, Pakistan’s share will increase to 74 percent, while Russia’s will drop to 26 percent.

Islamabad plans to borrow the loan from Russian banks to cater to the needs of Russia’s spending in the project, which will be used to purchase pipeline and compressors.

Russian energy corporations are expected to play a minor role in physically providing gas to Pakistan once the pipeline is operational.

What is the route of Pakistan Stream?

Pakistan Stream is proposed to stretch from the port city of Karachi – southern Pakistan – to the city of Kasur in Punjab, which resides in the northeast of the country.

The idea behind its creation was to increase natural gas consumption within Pakistan’s borders.

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Overall, Russia has eight pipelines which feed natural gas into Europe – six of which are fully operational.

These are all owned and operated by Gazprom, a Russian majority state-owned multinational energy corporation.

Gazprom is both the largest publicly-listed natural gas company in the world, and the biggest in Russia by revenue.

Currently, the Turkstream pipeline is in half working order, while the Nord Stream Two system has yet to be opened.

Due to the ongoing crisis in Ukraine, US President Joe Biden has threatened to prevent the opening of Nord Stream Two altogether.

The 1,225km (760 miles) pipeline took five years to build and cost $11bn (£8bn).

However, it is not yet operational, as regulators said last November it does not comply with German law and consequently suspended its approval.

If it is opened, Nord Stream Two is expected to supply 55 billion cubic metres of gas per annum (BCMPA) to a host of countries in central and western Europe.

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