Gas pipeline projects among PM’s Russia visit agenda

Islamabad keen to sign Pakistan Gas Stream Project and pipeline from Kazakhstan project with Moscow

Zaffar Bhutta February 17, 2022
Prime Minister Imran Khan receives a telephone call from Russian Federation President Vladimir Putin on August 25. PHOTO: FILE


Prime Minister Imran Khan, during his upcoming visit to Russia, will take up the agenda of two mega gas pipeline projects there in the wake of the country’s “fast-depleting” local reserves.

Sources told The Express Tribune that the 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.

A delegation from Moscow was in Islamabad 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 PM Imran’s visit.

Another project which is likely to be on the agenda is the gas pipeline from Kazakhstan.

Officials said Russia had already built a gas pipeline from Kazakhstan that passes through Azerbaijan. Russian company Gazprom has completed the project up till the Afghanistan border but now it is facing certain sanctions from the US. Gazprom cannot export gas to any country above a certain volume.

They added that the volume allowed under US sanctions would be enough for Pakistan.

Read PM Imran to visit Russia this month

Even remaining under the US sanction, 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 Pakistan had written a letter to the Russian government for this purpose and 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 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.

Read more Domestic fuel prices to rise amid Russia-Ukraine crisis

Pakistan is also moving ahead to complete 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% shares and will be responsible for maintaining the pipeline.

On the gas price of TAPI, officials said it would cost around $6-7 per mmbtu.

However, Pakistan has been importing LNG at an average price of $12 per mmbtu.

Moreover, Pakistan feels that LNG is not a permanent solution to the country’s gas crisis. Different countries use it as stop gap arrangement to overcome their gas crises.

Therefore, Pakistan is now focusing on the execution of TAPI pipeline project along with gas pipeline from Kazakhstan to meet its future demand.

The officials said TAPI project would meet 20% of the country’s gas requirement -- which is considered to be cheaper in comparison with importing LNG to Pakistan.


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