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Pakistan will start construction of Karachi-Lahore gas pipeline in 2021

Pakistan plans to start construction works on the Pakistan Stream Gas Pipeline project in July 2021.The 12.4 bcm/year gas pipeline would connect Karachi to the provincial capital Lahore over 1,100 km. In November 2020, Pakistan and Russia signed a revised agreement to build the Pakistan Stream Gas Pipeline, formerly known as the North-South Gas Pipeline. Under the new agreement, the project will be executed through a special purpose company incorporated in Pakistan, and Pakistan will own 74% of the project, while Russia will have a 26% stake.

In 2015, Resources, a subsidiary of Rostec (Russia), had been selected to build the gas pipeline project under a build, own, operate and transfer (BOOT) model and planned to transfer its ownership to Pakistan after 25 years. Total investment was estimated at US$2.5bn. The project is still at the planning stage as a consequence of US sanctions against Russian entities and dissensions between the two parties over fees. Pakistan refused to move forward with a new proposed Russian partner, whose owner is on the US sanctions list.