ISLAMABAD, June 27: Pakistan and Russia are expected to sign a memorandum of understanding (MoU) in Moscow early next month to allow a Russian firm to actively pursue the construction of $3.2 billion gas pipeline from Iran to India besides assisting Pakistan in converting diesel vehicles to CNG.

Official sources told Dawn on Thursday that Minister for Petroleum Usman Aminuddin would be in Moscow on July 10 on the invitation of his Russian counterpart to sign the MoU.

The MoU would allow Russian energy firm Gazprom to launch a study on the construction of the pipeline and negotiate with international financial institutions for financial support to the project.

The MoU would be a follow-up to a visit of the Gazprom high-level delegation to Islamabad in the last week of May this year. The ministry of petroleum and natural resources had encouraged the Gazprom to proceed on the project and help convert diesel engines to CNG in Pakistan.

These sources also indicate that Moscow and Islamabad are also in the process of arranging the visit of President Pervez Musharraf to Russia in the second week of July and it was expected that petroleum minister would accompany the president. But in case the president’s visit did not take place then the petroleum minister would separately visit Moscow on July 10.

These sources said that during the visit of Gazprom delegation to Islamabad in May, Pakistan did not make any firm commitment for the construction of $3.2 billion Iran-Pakistan- India gas pipeline for want of formal approval by President Pervez Musharraf.

The president has now allowed the petroleum ministry to keep all options of gas import open and to sign an MoU with Russia for cooperation without undermining the trans-Afghanistan gas pipeline from Turkmenistan to Pakistan.

Under the memorandum of understanding, the Russian firm would prepare proposals on cooperation for consideration of the Pakistan government to be followed up by relevant agreements for cooperation.

The draft MoU available with Dawn suggests that Gazprom would undertake a pre-feasibility study for transportation of natural gas under its proposals into or across the territory of Pakistan.

It says that Pakistan would facilitate the efforts of the Russian firm and provide information as may be available in the areas of interest regarding oil and gas sector under a confidentiality agreement.

Both parties would also enhance mutual cooperation by exchange of visits to each others’ countries for mutual benefit. All disputes concerning the interpretation and application of the MoU would be settled through mutual consultations.

The MoU would have a validity period of one year or till the conclusion of relevant agreement, whichever comes first. The Russian firm has already discussed these issues with Indian authorities early this year and with Iranian officials in April this year.

Gazprom, that was asked by Indian government to look into the possibility of under-water pipeline from Iran to India in October last, has finally concluded that this option was not feasible and faced technical, political and economic risks.