Pakistan is all set to hold talks with a Russian delegation, arriving tomorrow, on an oil and liquefied natural gas (LNG) trade deal.
According to senior officials of the Energy Ministry, the Delegation is reaching Pakistan on a long-term basis and the much-touted flagship $3 billion Pakistan Stream Gas Pipeline (PSGP) project.
The delegation from Russia, comprising 80 members that will arrive in Pakistan by 17th January 2023 for three-day bilateral talks under the forum of the Inter-Governmental Commission (IGC).
According to initial reports by Energy Officials, “The Pakistani side will be headed by Federal Minister Sardar Ayaz Sadiq for the IGC talks. For the import of Russian oil and LNG on a GtG basis, both countries need to first negotiate the IGA (inter-governmental agreement) as had been finalized and inked in the case of the Pakistan Stream Gas Pipeline Project (PSGP), which was earlier called the North-South Gas pipeline project”
Last year Former prime minister Imran Khan visited Moscow and the draft of the shareholding and facilitation agreement for PSGP was not finalized. Both sides wanted to sign the PSGP deal during the Imran-Putin meeting but it did not happen because of a disagreement on some clauses of the shareholding agreement from experts from both sides.
Remember here one thing that Right now G7 countries have imposed a price cap of 60 Dollars per barrel on Russian crude oil with a ban on Russian ships for oil transportation. In return, Russian officials claim that it would ban oil sales to countries that join a Western price cap on the country’s crude.
It is to be intimated that During the talks, the Pakistan side needs to discuss the shipping cost, the premium by shipping trader, insurance cover, and mode of payment.
Both sides will also discuss prospects of cooperation in the field of electric power, hydropower, renewable energy sources, and oil and gas production.
Discounted Crude Oil :
Last year on 5th December 2022, State Minister for Petroleum Division Musadik Malik announced that Russia decided to provide crude oil, petrol, and diesel to Pakistan at discounted rates.
The decision comes a month after Finance Minister Ishaq Dar said that the country is considering buying discounted Russian oil, pointing out that neighbor India has been purchasing oil from Moscow and Islamabad also has a right to explore the possibility.
Subsequently, Minister of Petroleum division Musadik Malik flew to Russia last week for talks regarding oil and gas supplies at discounted rates.
In a press conference, Musadik Malik claimed that: “Our visit to Russia turned out to be more productive than expected.”
“Russia has decided to provide Pakistan crude at discounted rates […] this is the oil that refineries use to produce diesel and petrol […]. Russia will also give petrol and diesel to Pakistan at lower prices,” he announced.
Minister of Petroleum Division Musadik Malik went on to say that Russia was short on liquefied natural gas (LNG) because of “international pressure”. “So they arranged a meeting of ours with some private companies, that were a part of their delegation […] our talks with them [the companies] have now begun.
“The Russian government is setting up new factories for the production of LNG and they have invited Pakistan to begin talks on long-term contracts for 2025 and 2026,” the minister said.
He also revealed that Russia was “very interested” in pipeline gas supplies to Pakistan and talks between the countries regarding two projects Pakistan Stream (north-south pipelines) and another big pipeline (for internationally piped gas) had begun.
Musadik Malik added that an inter-governmental delegation from Russia would be visiting Pakistan in January next year. “We will try that all these things that I have kept in front of you will be transformed into a proper agreement by then and could be signed.”
Now The Russian Delegation is to visit Pakistan by tomorrow in order to hold talks with Pakistani officials in order to finalize a deal over Crude oil.