ISLAMABAD: Pakistan and Russia started talks in Islamabad on Wednesday with an oil and gas deal on discounted rates as well as a long-delayed gas pipeline on the agenda, a senior official at Pakistan’s energy ministry said.
An 80-member Russian delegation led by energy minister Nikolay Shulginov arrived in Islamabad today, Wednesday, to attend an Inter-Governmental Commission (IGC), the eighth such meeting.
To reduce pressure on fast-depleting foreign reserves, Pakistan has been negotiating with Russia to import oil and gas at discounted rates in order to cut down the cost of energy products,which surpassed $23 billion in the last financial year and constituted 29 percent of the country’s total imports.
Talks are also ongoing on the long-delayed gas pipeline, the Pakistan Stream gas project, also known as the North-South gas pipeline, that is to be built in collaboration with Russian companies.
The two countries agreed in 2015 to build a 1,100 km (683 mile)-long pipeline to deliver imported liquefied natural gas (LNG) from Karachi on the Arabian Sea coast to power plants in the northeastern province of Punjab.
“In today’s agenda import of oil, gas, LNG and Pakistan Stream Gas Pipeline will be discussed,” Qazi Imran-ud-Din, deputy secretary at the petroleum division of Pakistan’s energy ministry, told Arab News. “Moreover, geological survey, exploration, and mineral sector will also be under discussion.”
Last month, days after he led a government team to Moscow, Pakistan’s state petroleum minister said Russia would sell crude oil to Pakistan at a discounted price as well as supply discounted petrol and diesel. He did not specify the price of the discounted Russian oil or say whether the imports would comply with a $60 per barrel cap imposed by the G7 nations and the EU on Russian seaborne oil from this week over Russia’s invasion of Ukraine.
Moscow has said it will not sell to countries that comply with the cap.
Pakistan has been unable to procure LNG from the international market because spot prices remain out of its range and shipments under long-term deals remain insufficient to match rising demand.
With dwindling local gas reserves, the country has begun to ration supplies to residential and commercial consumers. Local media has also reported that oil supplies remain tenuous owing to difficulties in paying for imports.
Oil and energy make up the largest portion of Pakistan’s imports bill.
“This session aims at reviewing the existing areas of cooperation and finding new opportunities for further deepening the bilateral relations,” Dr. Kazim Niaz Secretary, Ministry of Economic Affairs said while addressing the opening session of the IGC. “Enhancing economic trade and investment relations is a prime priority of Pakistan.”
Israfil Ali-Zade, a deputy director at the Russian ministry of economic development, said his country valued its relations with Pakistan and both countries had a “good level of cooperation” in all sectors of the economy.
“There is the great potential between both economies that needs to be explored further and we aim to enhance economic cooperation further,” Ali-Zade added.
Sumra Abbas, a spokesperson for the government’s economic affairs division, said both sides would hold technical sessions on finance, customs, commerce, trade, and investment in communication, roads, railways, and energy on January 18 and 19
“These talks will be finalized by tomorrow [Thursday] evening,” she told Arab News, “and on Friday, during the final session, the decisions will be announced.”
