Pakistan and Russia Discuss Multi-Billion Dollar LNG Pipeline Project

Putin and Shehbaz in Kazakhstan for the regional summit, marking their second meeting.

In a significant development at the regional summit in Kazakhstan, Russian President Vladimir Putin and Pakistani Prime Minister Shehbaz Sharif held their second meeting to discuss a multi-billion dollar agreement for constructing a liquefied natural gas (LNG) pipeline. This proposed pipeline, which could potentially extend through Iran to Pakistan and even connect to India, marks a strategic move to bolster bilateral trade and energy cooperation between the two nations.

Strengthening Bilateral Trade

Prime Minister Shehbaz emphasized the importance of enhancing bilateral trade with Russia, aiming to work closely with President Putin to strengthen their economic ties. Currently, the annual trade volume between Pakistan and Russia stands at $800 to $900 million, but there are ambitious plans to increase this to $20-$25 billion in the coming years. This initiative underscores Pakistan's commitment to diversifying its energy sources and improving regional connectivity.

Evaluating Viable Options Amid Sanctions

Senior officials revealed that various ministries are conducting preliminary studies on the feasibility of the LNG pipeline. Petroleum Minister Musadik Malik is leading the evaluation of viable options, considering the complexities posed by US sanctions on both Russia and Iran. The government is exploring multiple routes for the pipeline, given the historical challenges in realizing regional energy projects.

Russia's Search for New Markets

The proposed LNG pipeline project is part of Russia's broader strategy to find new markets amidst a significant reduction in trade with European countries—down by 70%. This project revives a history of cooperation between Islamabad and Moscow, including a 2015 agreement to build a 1,100-kilometer pipeline to transport LNG from Karachi to Punjab power plants.

Navigating US Sanctions

Despite the promising prospects, US sanctions remain a major hurdle. Washington's sanctions against Russia and those engaging with Moscow have previously stalled the 1,900-kilometer Pak-Iran gas pipeline, intended to supply Pakistan with up to one billion cubic feet of natural gas per day. To navigate these challenges, Pakistan may consider adopting a strategy similar to Turkey's, which managed to secure a commercial agreement with Russia without severe repercussions from US sanctions.

Looking Ahead

As Pakistan and Russia explore this significant energy cooperation, the relevant ministries continue to assess how best to balance regional and global dynamics. The outcome of this project could significantly enhance Pakistan's energy security and contribute to a robust bilateral relationship with Russia.

This development follows a recent offer by President Putin during the Shanghai Cooperation Organisation (SCO) summit, highlighting the potential for increased collaboration and trade between Pakistan and Russia. As the preliminary studies progress, the world watches closely to see if this ambitious project will come to fruition, potentially reshaping the energy landscape in South Asia.