The 80-member Russian delegation led by Russian energy minister Nikolay Shulginov arrived in Islamabad for three-day (January 18-20) talks on energy and trade. Image Credit: Ministry of Economic Affairs

Islamabad: Pakistan and Russia began talks in Islamabad on an oil and gas deal on discounted rates and the long overdue gas pipeline project as Pakistan actively explores options to meet the growing energy demand.

The 80-member Russian delegation led by the energy minister Nikolay Shulginov arrived in Islamabad for the 8th meeting of the Pakistani-Russian Intergovernmental Commission on Trade, Economic, Scientific, and Technical Cooperation which began in Islamabad on Wednesday. The three-day session aims to review the existing areas of cooperation and explore new opportunities to expand bilateral relations. The discussions will revolve around these topics: trade and investment, energy, agriculture, customs, finance, industrial and agricultural cooperation, education, science, and technology.

At the opening session on Wednesday, Dr. Kazim Niaz, Pakistan’s secretary ministry of economic affairs, said that there is a huge trade and investment potential between Pakistan and Russia. “Enhancing economic trade and investment relations is a prime priority of Pakistan,” he said. Israfil Ali-Zade, deputy director at the Russian ministry of economic development, said that Russia valued its relations with Pakistan and both countries had a “good level of cooperation and Russia aimed to enhance it further.” He said there was a “great potential between both economies that needed to be explored more.”

Pakistan Stream gas pipeline

On the final day of talks on Friday, the two sides would discuss the implementation of the ‘Pakistan Stream gas pipeline’ project as well as oil and petroleum products delivery to Pakistan, logistical and financial issues such as payment mechanism before the signing of the final protocol of the 8th meeting of the commission.

Pakistan and Russia agreed in 2015 to build a 1,100-km-long gas pipeline for the delivery of 16 billion cubic meters of natural gas annually from LNG terminals in Karachi and Gwadar with those in Punjab. Experts have urged authorities for the swift implementation of the $2.5 billion Pakistan Stream gas pipeline to improve the availability of natural gas and meet the demands of households and industries.

“Pakistan Stream is significant for both Russia and Pakistan” however, the “approach to the implementation of such projects has to be comprehensive, it means not only a pipeline but also a source of gas for it. We are currently discussing the project both from the point of view of transporting regasified gas and pipeline gas from Iran or through TAPI” (Turkmenistan-Afghanistan-Pakistan-India), Russian energy minister Nikolay Shulginov said in an interview with a Pakistani newspaper. “It is crucial to carefully study all the options available and come to the most transparent and economically justified one,” he said, expressing hope that both countries will soon work out a roadmap.

Oil on discounted rates

Last month, Pakistan’s minister of state for petroleum Musadiq Malik said that Russia had agreed to export crude oil, gasoline, and diesel to Pakistan at discounted prices. Russia had eight different types of crudes of which two could be used by refineries in Pakistan, Malik said after visiting Moscow in December 2022 where he met with his Russian counterparts.

Besides Russia, Pakistan is examining the possibility to purchase both crude oil and finished petroleum products from the United Arab Emirates (UAE). To urgently meet the domestic demand, Pakistan is also considering importing 20,000 tonnes of additional gas from Azerbaijan during the next two months, according to state media. TAPI and Pakistan Stream gas pipeline projects are significant for the South Asian country as natural gas is rapidly depleting in Pakistan by 9 percent annually.