Islamabad and Moscow have agreed on a draft of the shareholders' agreement for construction of the Pakistan Stream Gas Pipeline project and are set to sign the accord by February 15, 2022, the Pakistani Embassy in Moscow said on Friday.

"Pakistan and Russia have agreed on 'Discussion Draft' of the Shareholders Agreement for the Special Purpose Company (SPC) for construction of the 'Pakistan Stream' gas pipeline project and resolved to sign the Shareholders Agreement by February 15, 2022," the embassy said in a statement obtained by Russia's Sputnik news agency. 

The discussions on the draft were held during the 7th meeting of the Pakistan-Russia Inter-Governmental Commission on Trade, Economic, Scientific, and Technical Cooperation held in the Russian city of Yekaterinburg from November 24-26.

The Pakistani delegation included Minister for Economic Affairs Omar Ayub Khan, Ambassador to Russia Shafqat Ali Khan, among other officials. The Russian side was headed by Minister of Energy Nikolay Shulginov, and comprised representatives from energy, trade, economy, agriculture and transport sectors.

According to the statement, Pakistan and Russia further agreed to develop and sign the Facilitation Agreement for the Pakistan Stream gas pipeline by February 15, 2022 and statutory documents of the Special Purpose Company for the construction of the gas pipeline by January 31, 2022.

The capacity of the Pakistan Stream gas pipeline may reach 16 billion cubic meters, Shulginov said on Friday. Pakistani minister for economic affairs stated that the pipeline’s construction cost is estimated at $3.5 billion.

The pipeline will secure the delivery ultimately of 16 billion cubic meters (bcm) of natural gas per year from the liquefied natural gas (LNG) terminals in Karachi and Gwadar to the large city of Lahore. This project, to cost $3.5 billion, will be the first such large-scale economic initiative between Moscow and Islamabad undertaken since the mid-1970s.

The Pakistan Stream Gas Pipeline will surely become an important instrument for Russia to reactivate the South Asian vector of its foreign policy, the Eurasia Daily Monitor commented. (SAM)