ISLAMABAD: The News, citing senior officials from the Energy Ministry, reported on Monday that Pakistan is scheduled to hold bilateral talks with a Russian delegation that will arrive tomorrow regarding a long-term oil and liquefied natural gas (LNG) trade deal as well as the much-hyped flagship $3 billion Pakistan Stream Gas Pipeline (PSGP) project.
The 80-member delegation will arrive in Pakistan on January 17 for three days of bilateral talks in the Inter-Governmental Commission (IGC) forum.
For the IGC talks, the Pakistani side will be led by Federal Minister Sardar Ayaz Sadiq. Both nations must first negotiate an IGA (intergovernmental agreement) in order to import Russian oil and LNG on a GtG basis, as was done with the Pakistan Stream Gas Pipeline Project (PSGP), which was previously known as the North-South Gas pipeline project.
On February 24, 2022, when former Prime Minister Imran Khan went to Moscow, the draft of the PSGP shareholding and facilitation agreement was not finished. During the Imran-Putin meeting, both parties desired to sign the PSGP deal, but they were unable to do so due to disagreements between experts on a few provisions of the shareholding agreement.
The G7 countries currently prohibit Russian ships from transporting oil and impose a price cap on Russian crude oil of $60 per barrel. In response, Moscow stated that it would prohibit the sale of oil to nations that participate in a Western price cap on the nation’s crude.
The Pakistani side must discuss the shipping cost, shipping trader premium, insurance coverage, and payment method during the talks.
Agriculture, energy, customs, industry, education, science and technology, information and communication technologies, communication, roads and postal service, railways, and finance are all on the IGC’s agenda for cooperation in trade and investments. Pakistan’s debt to Russia settlement will also be discussed.
Additionally, the potential for cooperation in the areas of oil and gas production, hydropower, renewable energy sources, and electric power will be discussed by both sides.
Discounted crude oil
Musadik Malik, Minister of State (Petroleum Division), announced on December 5, 2022, that Russia had agreed to offer Pakistan discounted prices on crude oil, gasoline, and diesel.
Malik stated, “Our visit to Russia turned out to be more productive than anticipated.” He went on to say that Russia lacked LNG. We have also engaged Russia’s state LNG producers and are in talks with private Russian companies about the import of LNG, Malik stated.
The state minister claims that talks with Moscow regarding the pipeline projects made significant progress.
During talks in Moscow during Pakistan’s visit to Russia, the Russians denied Pakistan’s request for a 30%-40% discount on Russian crude oil because all volumes were already committed.
Moscow asked Pakistan to first honor its commitment to the flagship project, the Pakistan Stream Gas Pipeline (PSGP), which was to be built from Karachi to Lahore, Punjab, during talks about the gas pipeline projects.
The Pakistani team suggested altering the PSGP project’s model in their response. Except for a few provisions of the shareholding agreement, which would soon be finalized, the Russian side stated that the project model under the GtG arrangement had already been settled.
