Featured Pakistan and Russia signed the Agreement on North-South Pipeline Project

[farok84]

Second day of talks on PSGP: Russian bank to provide financing for mega project to Pakistan
By Khalid Mustafa
October 27, 2021

ISLAMABAD: Pakistan and Russia took a pause for two days in the ongoing talks on the Pakistan Stream Gas Pipeline Project (PSGP) with both sides asking their respective legal teams to sit down and discuss and finalise every clause of the proposed draft of shareholding agreement, keeping in view the national and international laws, by Thursday morning.

And more importantly, the government has got an undertaking from all the members involved in the negotiations from both sides that they will not divulge to media persons any kind of information about the ongoing talks. It is important to know that the ongoing talks will last till October 28.

Sources said that a Russian-nominated entity, PAKSTREAM LLC, presented the briefing on its side of the draft for shareholding agreement. It was also noticed in the meeting that the government side adopted one step forward and two steps back policy, which irritated the Russian side.

To a question, the official said that the Russian GAZPROM bank will be financing the project and they (Russians) introduced their mechanism of giving loans on the second day of talks. The government wants the loans from Russian Financial Institutions against its shareholding of 74 percent, but delegation from Moscow wants the guarantee from Islamabad that Pakistan will not offload its share to a third party until it completes the repayment of the loan and mark-up.

The Finance Division, according to the top official, has utilized the amount of Rs325 billion collected under the head of GIDC (Gas Infrastructure Development Cess) from the gas consumers for the development of new gas infrastructure, which includes TAPI, IP and North-South Gas Pipeline, renamed as Pakistan Stream Gas Pipeline Project. Now the Finance Division wants debt from Russia for financing Pakistan's shareholding, which may be up to $1.5-2 billion. It will be used for purchasing the pipeline and compressors. And the Russian side will also spend the amount of $700-800 million against its 26 percent shareholding in the project.

This is how the masses who had earlier paid to the government the amount of Rs325 billion as GIDC will again pay for the loans and debt servicing in the shape of transportation tariff, which may go up to $1-1.5 per MMBTU. And if the government manages to fully utilize the GIDC amount on the project, then the transportation tariff would have been nominal only to cater to the financial requirements of O&M (operational and maintenance) cost. However, the new situation poses the question as to what the government reply will be to the Supreme Court on utilization of GIDC.

Second day of talks on PSGP: Russian bank to provide financing for mega project to Pakistan

ISLAMABAD:Pakistan and Russia took a pause for two days in the ongoing talks on the Pakistan Stream Gas Pipeline Project with both sides asking their respective legal teams to sit down and discuss...

www.thenews.com.pk

 

[farok84]

Pak-Russia $3 bn PSGP project: Talks on shareholding contract may end up inconclusively

By Khalid Mustafa
October 28, 2021

ISLAMABAD: The Pak-Russia talks on shareholding agreement (SHA) on the flagship $3 billion Pakistan Stream Gas Pipeline (PSGP) are most likely to end inconclusively today (Thursday) as both the legal teams have so far failed to agree on critical elements of the contract.

The shareholding agreement document is too big and it is not possible for the legal teams to finalize it by today (Thursday), a senior official at the Energy Ministry told The News. However, the talks on financial, legal and technical issues will continue through video links and the Russian delegation will again visit Islamabad to finalise the agreement.

However, sources said that the Pakistan side was not well prepared and on the third day of talks, their body language remained negative and no talks could be held from 12 noon to 4 pm. The secretary petroleum joined the talks at 4pm as earlier he was busy because with his other official engagements.
The inconclusive talks on SHA will not only delay the project but also the construction and commissioning of new LNG terminals, one by Energas and other one by Tabeer, which are aligned with the PSGP’s commissioning. The delay in finalizing the agreement will also defer the initiation of pipeline's construction work.

However, the sources said that legal teams of both sides have been asked to furnish the list of common or agreed points of the Shareholding Agreement draft and the remaining clauses will be deliberated later on. The Russians have clearly asked the Pakistan legal team not to unilaterally remove or add points in draft.

More importantly, Moscow also raised the query as to what will happen if it provides finances for the PSGP against the shareholding of Pakistan but the Government of Pakistan offloads its share to a third party.

Meanwhile, the Petroleum Division issued a very tricky statement here on Wednesday saying that talks on PSGP continue on a positive trajectory claiming the project is on track to meet the timelines, but in the same statement highlighted that any negotiations involving a project of such magnitude including financial, technical and legal details require time, understanding between the parties and arriving on mutually beneficial consensus. This means that talks will remain inconclusive by today (Thursday) after the end of four days’ time.

According to the official statement, the two countries are currently holding the first session of negotiations over the Shareholders Agreement (SHA) of the Pak Stream Gas Pipeline.

The Pakistani team was led by Dr. Arshad Mehmood, Secretary Petroleum Division, Syed Zikria Ali Shah, Managing Director of Inter State Gas Systems, and other officials of the Petroleum Division. Moreover officials from the AG office, Law Division, Foreign Office and Finance Division also attended the session. Vladimir Shcherbatykh, General Director of PakStream Ltd, is heading the Russian side with other officials from the Russian delegation comprising financial and technical experts from the Russian government and allied entities. The 1,100-km gas pipeline is to be laid from Karachi to Kasur (Lahore) with 1.6 bcfd capacity. The Pak Gas Stream Pipeline project is a strategic project, which has made more progress in the last four months than the preceding five years.

Pak-Russia $3 bn PSGP project: Talks on shareholding contract may end up inconclusively

ISLAMABAD: The Pak-Russia talks on shareholding agreement on the flagship $3 billion Pakistan Stream Gas Pipeline are most likely to end inconclusively today as both the legal teams have so far...

www.thenews.com.pk

 

[farok84]

Pakistan, Russia to sign SHA for gas pipeline in Nov
Reaffirm commitment to Pakistan Stream Gas Pipeline project


Our Correspondent
October 29, 2021

The Russian side arranged a meeting with the financial advisers led by banks. photo: file
ISLAMABAD:
Pakistan and Russia have reaffirmed their unequivocal commitment towards the strategic Pakistan Stream Gas Pipeline project and resolved to finalise the Shareholders’ Agreement (SHA) during the month of November.

During the fourth Russia-Pakistan Joint Technical Committee meeting on Pak Stream Gas Pipeline, which concluded on Thursday, the two countries discussed the draft of Shareholders Agreement (SHA) of the scheme.

The Pakistan side was headed by Petroleum Secretary Dr Arshad Mahmood while the Russian Technical Committee was led by the CEO of Russian nominated entity Vladimir Shcherbatykh.

Having signed the Head of Terms (HOT) in July this year, the parties held in depth discussions covering all major issues pertaining to the SHA in a cordial and congenial environment and developed consensus on key issues.

The Russian side arranged a meeting with the financial advisers (led by banks). The parties exchanged their views on the global best practices for financing similar infrastructure projects and discussed their experience in the Asian and global markets.

The two parties agreed to continue working on the draft SHA during the next week. They further reached a consensus to resume negotiations in Islamabad from the week beginning November 8, 2021.

The Russian side appreciated hosting the meeting in a cordial atmosphere and support of the Pakistan team in concluding the key issues of the Shareholders Agreement.

Published in The Express Tribune, October 29th, 2021.

Pakistan, Russia to sign SHA for gas pipeline in Nov | The Express Tribune

Reaffirm commitment to Pakistan Stream Gas Pipeline project

tribune.com.pk

 

[nahtanbob]

it looks like vaporware to me. Russians got fooled on this one

 

[TigerOfMysore]

Madness and almost criminal that such an important project is not being taken seriously.

 

[Titanium100]

Madness and almost criminal that such an important project is not being taken seriously.

It is going under radar here just like the most important topics does here.. If you post instead some fake news gossipi stuff it will get interest

 

[Genghis khan1]

So if Pakistan have foreign reserves to pay for the pipeline, and project is likely to generate revenue for investor, then why get another expensive loan and pay interest on it and ROI in dollars to another country.

Spend $2 billion from pocket and get it over with. Same things for Dams.

Atleast Pakistan don’t have to buy dollars and devalue currency because she is unable to pay foreign lenders and investors in dollars.

 

[nahtanbob]

So if Pakistan have foreign reserves to pay for the pipeline, and project is likely to generate revenue for investor, then why get another expensive loan and pay interest on it and ROI in dollars to another country.

Spend $2 billion from pocket and get it over with. Same things for Dams.

Atleast Pakistan don’t have to buy dollars and devalue currency because she is unable to pay foreign lenders and investors in dollars.

as per above articles the project is owned 74% by Pakistani entities. the pakistani stake is financed by Russian loans
'

 

[Genghis khan1]

as per above articles the project is owned 74% by Pakistani entities. the pakistani stake is financed by Russian loans
'

That’s what Pakistan is trying to achieve, but just like Chinese or any Other Foreign investor they want all kind off guarantees and ROI in dollars. If Pakistan is putting everything on line to convince investors, why not just use reserve and do it yourself.

It’s like kicking balance of payment can down the road instead of picking it up.

 

[nahtanbob]

That’s what Pakistan is trying to achieve, but just like Chinese or any Other Foreign investor they want all kind off guarantees and ROI in dollars. If Pakistan is putting everything on line to convince investors, why not just use reserve and do it yourself.

It’s like kicking balance of payment can down the road instead of picking it up.

What is the point of arguing the obvious ? If Pakistani government has money they would not be getting line of credit from the Saudis. They do not have the money to finance this project.

In any case they are trying to offer Russians carrots for economic relationship. It remains to be seen whether this project goes anywhere

 

[farok84]

Blow to $3 bn gas pipeline project: Russia upset over new move by PD for renegotiation on settled issues

The 'powerful circles' had highlighted the suspicious involvement of some civil indenters who had ruined the project earlier

By Khalid Mustafa
November 08, 2021

Workers are seen at the construction site of the Nord Stream 2 gas pipeline, near the town of Kingisepp, Leningrad region, Russia, June 5, 2019.File photo

ISLAMABAD: In a massive blow to the $3 billion Pakistan Stream Gas Pipeline project (PSGP), the flagship and strategic project of Pakistan and Russia, the Petroleum Division has opened a new Pandora's box asking for re-negotiations on issues already settled in inter-governmental agreement (IGA) and approved by the federal cabinet.

This has been asked from Russia in a letter that was written directly by the Joint Secretary, Petroleum Division, to the Deputy Director of Department of Foreign Economic Cooperation and Fuel Markets Development, Ministry of Energy of the Russian Federation. The direct letter to the Energy Ministry of Russia is also a negation of the protocol, which was finalized a year back when the-then SAPM on petroleum was Nadeem Babar. At that time, it was decided that the government-to-government communication would be made through foreign ministries of both the countries.

The 'powerful circles' had highlighted suspicious involvement of some civil indenters who had ruined the project earlier; unfortunately, they are again in the lead and want to sabotage the project. Unless the MoEs of both countries are directly communicating, this project will remain in trouble as civil indenters, who have managed inroads into the Ministry of Energy, have their own financial benefits attached to the project.

The letter has reportedly upset Russia as Moscow deems the letter asking for guarantees from Russian Nominated Entity. The EPC contractor is tantamount to a flagrant breach of IGA and Heads of Terms. And no one knows what authority the Petroleum Division has to initiate a re-negotiation of a government agreement without any input or approval from the federal cabinet.

Top sources said that the Russian delegation that was due to start talks on November 9-12 in Islamabad to finalize the remaining points of the shareholding agreement has been stopped by the authorities in Moscow.

They took the letter, the sources said, from the Petroleum Division as a shocking surprise and called back the Russian delegation to Moscow that was in Dubai to reach Pakistan on November 9, 2021.

Pakistan and Russia earlier held four-day talks to finalize the shareholding agreement in Islamabad on October 25-28, which ended inconclusively with the announcement that both sides would again hold more talks in Islamabad from the week starting from today (November 8) onward. Now the letter written on November 05, 2021 by Joint Secretary Development in Petroleum Division Syed Zakria Shah to Alexander Tolparov, Deputy Director of Department of Foreign Economic Cooperation and Fuel Markets Development, Ministry of Energy, Russian Federation, has compelled Moscow to stop its delegation from coming to Pakistan for talks on shareholding for the time being. “Russia wants the time for reaction to the letter and then it will make up its mind if it should visit Pakistan or not for talks on shareholding.”
Top sources said that the names of the parties to become shareholders of the project company have already been agreed in an inter-governmental agreement signed in October 2015 and amended in May 2021 (IGA). Pursuant to the clauses of this agreement, further commitments have been made between May and October 2021, including the signing of a Head of Terms of a Shareholder Agreement to be signed between the parties representing their respective governments. Now, the sources said that the Petroleum Division wants to unilaterally and independently re-negotiate major covenants already agreed to.

The negotiations have been taking place subsequent to the IGA between the Pakistan Nominated Entity, Inter State Gas System (ISGS) and the Russian Nominated Entity, PAKSTREAM LLC, a draft shareholder agreement was shared with the ISGS for their comments and discussions, on which ISGS is dragging its feet. In fact, any specific discussion points regarding the shareholders agreement should have been raised by the ISGS instead of the Petroleum Division writing to their Russian counterpart, that too bypassing all government norms and procedures.

Highest offices of the PTI government want this strategic project to happen in the best possible way but unfortunately incompetency and mala fide of the Petroleum Division is not letting it happen. Top men of the Petroleum Division must be made accountable why such a letter has been written when the IGA, which clarifies Russian entities had already been approved by the cabinet and why such big issues like security from Russian government, EPC contractor can’t be shareholder, are highlighted in the letter just two days before the Russian delegation was to arrive.

This scribe sent a questionnaire to secretary petroleum, saying that the PD has written a letter to the Russian ministry for re-negotiations of some issues settled in the IGA, which has been approved by the federal cabinet and to this effect JS Development wrote a letter to the Russian deputy director in breach of protocol bypassing the MOFA. In the letter, the PD asked Russia to provide sovereign guarantee knowing the fact Russia has 26pc shares and their banks will provide debt to Pakistan. “Don’t you think that this letter would prove detrimental for the talks on Shareholding Agreement and why the PD has bypassed the Foreign Ministry for such correspondence knowing that fact a year back it was decided that since the project is being negotiated under G2G arrangement and no one from ministry will talk to any Russian company involved in the project and correspondence will take place between the governments through MOFA. This scribe has reports that the Russian side has got annoyed and postponed the talks for an indefinite period scheduled from Nov 9.

The secretary petroleum said that this is all a misunderstanding and legal teams of both sides are working jointly and sharing with each other feedback. “Russians are planning to come again. Rest is all propaganda,” he said.

Blow to $3 bn gas pipeline project

ISLAMABAD: In a massive blow to the $3 billion Pakistan Stream Gas Pipeline project , the flagship and strategic project of Pakistan and Russia, the Petroleum Division has opened a new Pandora's box...

www.thenews.com.pk

 

[Mohsin A]

Wow. Personal interests & corruption will be the end of this nation. If thus story is indeed true, then get the PD person responsible for the letter being sent without state approval, and hang him by the balls with barbed wire. Sick of people putting personal interests before the interests of the nation.

 

[Taimoor Khan]

The 'powerful circles' had highlighted suspicious involvement of some civil indenters who had ruined the project earlier; unfortunately, they are again in the lead and want to sabotage the project. Unless the MoEs of both countries are directly communicating, this project will remain in trouble as civil indenters, who have managed inroads into the Ministry of Energy, have their own financial benefits attached to the project.

Name these individuals and skin these MFs alive. And while doing it, check if they are agents of foreign hostile intelligence agencies with financial/family interests abroad.

 

[nahtanbob]

Name these individuals and skin these MFs alive. And while doing it, check if they are agents of foreign hostile intelligence agencies with financial/family interests abroad.

it is more likely these individuals are running the directives of powers to be in Pakistan. I see no benefit for Pakistan in this whole project

 

[farok84]

Four-day secret talks on $3 bn gas pipeline: Pakistan, Russia close to finalising Shareholders Agreement
By Our Correspondent
November 19, 2021

ISLAMABAD: Pakistan and Russia have reached close to finalizing the over 100 pages document of Shareholders Agreement after four-day talks on the $3 billion Pakistan Stream Gas Pipeline Project (PSGP) from Karachi to Kasur Punjab, which is a positive development.

Russia sent its delegation to Islamabad on November 16 after making its mind on new demand from the Petroleum Division, seeking renegotiation on the issues already settled for talks on the shareholding agreement and facilitation agreement. The talks continued for four days till November 18, which were kept secret and every participant was under oath from both sides that they will not utter any word to media persons. They were not allowed to carry their cell phones in the room where the talks were held.

Moscow earlier held back its delegation from holding talks scheduled from November 9, 2021 in Islamabad on shareholding agreement in the wake of the demand of Petroleum Division for re-negotiations on issues already settled in inter-governmental agreement (IGA) and approved by the federal cabinet.

Under the amended IGA, Pakistan will be having 74 percent shares and Russia 26 percent in the project. However, sources claimed that both sides once again failed to sign the Shareholding Agreement. The News contacted the secretary Petroleum Division, asking if a shareholding agreement has been signed or more talks were needed. He said: "We are continuously working and the pre-final draft was finalized on Wednesday but we are working on refining it to give it a final shape.” He said that the shareholding agreement document has more than 100 pages having multiple aspects, which are commercially and strategically important. He also said that talks remained very positive and on the right track, saying that lengthy discussions were held on many aspects of risk assessments and risk mitigation.

The press release issued late Thursday night says that the fifth Joint Technical Committee Meeting of the Pak Stream Gas Pipeline Project was held in Islamabad from 16-18 November, 2021. "The respective delegations held extensive consultations over the course of these discussions. The parties have expressed satisfaction over ironing out major outstanding issues in the Shareholders Agreement. The talks were held in an amicable environment that was characterised by mutual agreement, consensus and unanimity of views that has led to achieving stellar progress and very encouraging forward movement on the Shareholders Agreement. Both parties have also discussed broad contours of facilitation agreements, project financing, executional structure, formation of SPV, contracting strategy and the mechanism for the identification of the PMC and the FEED contract. Moreover, site surveys in Pakistan, manufacturing site visits in the Russian Federation were also discussed.

"The consensus and extremely encouraging headway achieved during the period of these talks has laid the groundwork for finalisation of a comprehensive Shareholders Agreement of Pak Stream Gas Pipeline. The momentous progress on major outstanding issues in the Shareholders Agreement during the parleys was attributed to mutual cooperation, understanding and a positive spirit of consensus. It is noteworthy that such issues were settled in a limited span of time. The untiring efforts of both parties which have committed themselves to the project can be ascertained by the series of agreements that have been concluded this year i.e. change in the project’s name/modalities, technical parameters, Head of Terms and the current progress on the Shareholders Agreement. The Russian side lauded their Pakistani counterparts for their forward-looking approach, thanked them for their hospitality and expressed confidence over the current state of PSGP. Both parties pledged to proceed ahead with renewed zeal, enthusiasm and remain undeterred by any hindrances. The parties resolved to meet the project’s schedule and timelines."

Four-day secret talks on $3 bn gas pipeline: Pakistan, Russia close to finalising Shareholders Agreement

ISLAMABAD: Pakistan and Russia have reached close to finalizing the over 100 pages document of Shareholders Agreement after four-day talks on the $3 billion Pakistan Stream Gas Pipeline Project ...

www.thenews.com.pk