Pakistan, Russia in gas pipeline accord

Pakistan and Russia signed an agreement yesterday to build a gas pipeline stretching hundreds of kilometres from Karachi on the Arabian Sea to the eastern city of Lahore.

Russian Energy Minister Alexander Novak and Pakistan Petroleum Minister Shahid Khaqan Abbasi signed the agreement at a ceremony witnessed by Pakistani Prime Minister Nawaz Sharif and broadcast live.

Officials said the North-South gas pipeline project would be built by Russian company RT Global Resources -- a part of Russian state corporation Rostec.

The 1,100-kilometre (680-mile) pipeline, with a capacity of 12.4 billion cubic metres (438bn cubic feet) per year, will connect liquefied natural gas (LNG) terminals in Karachi with those in Lahore.

Russia is to invest about $2bn in the pipeline and its first phase is expected to be completed by December 2017, a senior government official said. 

The project will take cooperation between Russia and Pakistan "to a new level", Novak said in a statement issued by ministry.

The statement said the pipeline will be operated by the manufacturer for 25 years before being transferred to the Pakistani government. 

Russia's ITAR-TASS news agency reported in June that the country had lifted its embargo on arms supplies to Pakistan and was holding talks on supplying Islamabad with combat helicopters.

Sharif at the time invited Russian companies to invest in Pakistan, particularly in the energy sector, and benefit from the business-friendly policies of the government.

The South Asian state is desperate for solutions to a long-running power crisis that has sapped economic growth and left its 200 million inhabitants deeply frustrated by incessant electricity cuts.