Pak PM Imran to take up agenda of 2 mega gas pipeline projects in Russia

Islamabad, Feb 17 (PTI). Pakistan Prime Minister Imran Khan will take up the agenda of two mega gas pipeline projects during his planned first visit to Russia this month for a key meeting with President Vladimir Putin, a media report said on Thursday.

Quoting diplomatic sources, The Express Tribune newspaper reported that Pakistan and Russia are expected to strike major deals during the trip, including a movement forward on Russian investment to build a USD 2 billion worth gas pipeline, in the wake of the country’s fast-depleting local reserves. Pakistan’s civilian and military leaderships were on the same page on signing the Pakistan Gas Stream Project and the gas pipeline from Kazakhstan project with Russia, the report said.

Khan’s visit to Russia, though not announced officially, will be the first by a Pakistani premier in over two decades. Khan is expected to visit Moscow from February 23 to 26, the newspaper earlier reported, quoting diplomatic sources. A Russian delegation was here recently to negotiate toll-free proceedings and tax exemptions in connection with the Pakistan Gas Stream Project.

The Pakistani leadership wants to sign a commercial agreement with Russia during Khan’s visit. Another project which is likely to be on the agenda is the gas pipeline from Kazakhstan. Officials said that Russia has built a gas pipeline from Kazakhstan that passes through Azerbaijan. Russian company Gazprom has completed the project up to the Afghanistan border but now it is facing certain sanctions from the US. Gazprom cannot export gas to any country above a certain volume.

According to the officials, the volume allowed under US sanctions would be enough for Pakistan. Even remaining under the US sanctions, Gazprom can export 14-15 billion cubic feet to Pakistan which will be enough to meet the country’s gas demand. The Russian company involved in the project had offered to provide gas from Kazakhstan to Pakistan. Pakistan was of the view that it would not deal with the company directly and negotiate a pact with the Russian government.

The officials said that Pakistan had written a letter to the Russian government for this purpose and was ready to take gas from this pipeline. Energy Minister Hammad Azhar had also announced at a news conference that Pakistan was looking towards the gas pipeline from Kazakhstan. The spot prices of Liquefied Natural Gas (LNG) have not remained stable in the world. Therefore, Pakistan wants a long-term contract for cheaper gas. The minister had warned that that country’s indigenous gas resources were depleting fast.

The officials said that Pakistan needs two pipelines to meet its gas requirements. Experts say that Pakistan should place a cap on local gas production to secure it at a cheaper price in the future. Gas from Kazakhstan and the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline project may meet Pakistan’s current needs that will be cheaper than LNG to ensure its energy security. Pakistan is also moving ahead to complete the TAPI gas pipeline project.

Pakistan and Turkmenistan had formed working groups to negotiate on the gas prices of the TAPI pipeline project. The two countries had also to sign a host agreement. However, the signing has hit a snag. Pakistan has 5 per cent shares and will be responsible for maintaining the pipeline. On the gas price of TAPI, officials said it would cost around USD 6-7 per Metric Million British Thermal Unit (MMBtu). However, Pakistan has been importing LNG at an average price of USD 12 per mmbtu. Moreover, Pakistan feels that LNG is not a permanent solution to the country’s gas crisis. Different countries use it as a stop gap arrangement to overcome their gas crises. Therefore, Pakistan is now focusing on the execution of the TAPI pipeline project along with a gas pipeline from Kazakhstan to meet its future demand.

The officials said the TAPI project would meet 20 per cent of the country’s gas requirement — which is considered to be cheaper in comparison with importing LNG to Pakistan, the report added. Khan will become the first Pakistani premier to visit Russia in 23 years after former premier Nawaz Sharif travelled to Moscow after the end of the Cold War.