Russian Natural Gas

Energy imports from Russia on discounted prices have been a Green Topic of discussion for mainstream media and political rivals across Pakistan for months. The discussion was launched by the then PTI government after a high-level delegation announced upon their return from Moscow later in February that Russia was ready to produce Pakistan with Oil, Wheat, Gas on cheaper prices.

At Islamabad’s side there have been denial and various announcements on official levels over Energy deals with Moscow, but the matter attained solid ground after Russian Deputy Prime Minister Alexander Novak confirmed to media that Russia was on the agenda to send its Natural Gas to the markets of Pakistan and Afghanistan.

On December 5, Pakistan’s State Minister for Petroleum Musadik Malik said that talks with Russian private firms were underway for the import of Liquefied Natural Gas (LNG). He had added that Islamabad also engaged with Russia’s state LNG producers.

Meanwhile, on September 18, Pakistani Defence Minister Khawaja Asif also said “Russia has proposed its gas pipelines infrastructure has been extended to Central Asian states which can be extended to Pakistan through Afghanistan to provide gas supplies”.

The then Prime Minister Imran Khan had on February 28 announced that his country was to import about 2 million tons of Wheat from Russia and buy Natural Gas as well under bilateral agreements the two sides signed a week earlier during his official trip to Moscow.

“We went there because we have to import 2 million tons of wheat from Russia. Secondly, we have signed agreements with them to import natural gas because Pakistan’s own gas reserves are depleting,” Khan had said.

In 2015, Russia and Pakistan agreed in principle to build a 1,100 km-long pipeline to deliver imported LNG from Karachi to power plants in Punjab. The Pipeline’s designed annual capacity stands at 12.4 billion cubic metres (bcm), with the possibility to be increased to 16bcm.

The cost will require investments of between $1.5bn, according to Russia, to as much as $3.5bn, estimated by Pakistan, with 26 per cent of it to be financed by Moscow and the remaining 74pc by Islamabad.

The project was to be launched in 2020, but Russia had to replace the initial participant after the company was hit by western sanctions not related to the Pakistan Stream project.

Considering the energy crunch Pakistan faces, as well as the country’s precarious financial situation, where it can ill afford to pay high energy prices, the Russian option should be seriously explored, especially since our American friends have now declared that they have no problem with developing states buying Moscow’s hydrocarbons.

In fact, taking advantage of the situation, Pakistan must also communicate to its Western partners that it should be free to purchase Iranian gas and oil to meet its energy demands. The most optimistic development is that now Russian side has announced their interest publically, but Pakistan needs to avail all feasible purchases from Russia on discounted prices in order to cope with prevailing economic crisis and skyrocketing inflation.