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Why Russian Delegation is Arriving in Pakistan Tomorrow?

 

Pakistan to discuss oil, LNG deal and $3B Pakistan Stream Gas project.

A Russian delegation of 80 people will arrive in Pakistan on January 17 for three days of bilateral talks under the Inter-Governmental Commission forum (IGC).

“For the IGC talks, the Pakistani side will be led by Federal Minister Sardar Ayaz Sadiq. To import Russian oil and LNG on a GtG basis, both countries must first negotiate an IGA (inter-governmental agreement), as was done in the case of the Pakistan Stream Gas Pipeline Project (PSGP), formerly known as the North-South Gas Pipeline Project,” they said.

The draught of the PSGP shareholding and facilitation agreement was not finalized when former Prime Minister Imran Khan visited Moscow on February 24, 2022.

Both sides wanted to sign the PSGP agreement during the Imran-Putin meeting, but it did not happen due to a disagreement between experts from both sides on some clauses of the shareholding agreement.

Currently, the G7 countries have imposed a price cap of $60 per barrel on Russian crude oil, as well as a ban on Russian ships transporting oil.

In exchange, Moscow has stated that it will prohibit oil sales to countries that join a Western price cap on the country’s crude.

During the negotiations, the Pakistani side must discuss the shipping cost, premium by shipping trader, insurance cover, and mode of payment.

The IGC agenda, on the other hand, focuses on trade and investment cooperation in areas such as agriculture, energy, customs, industry, education, science and technology, information and communication technologies, communication, roads and postal service, railways, and finance.

A resolution to Pakistan’s debt to Russia will also be discussed.

Both parties will also discuss potential areas of cooperation in electric power, hydropower, renewable energy sources, and oil and gas production.

Low-cost crude oil

Musadik Malik, Minister of State (Petroleum Division), announced on December 5, 2022, that Russia had agreed to provide discounted crude oil, gasoline, and diesel to Pakistan.

“Our trip to Russia proved to be more fruitful than expected,” Malik said. He also stated that Russia lacked LNG.

“Discussions with Russian private firms for LNG imports are underway, and we have also engaged Russia’s state LNG producers,” Malik said.

According to the State Minister

Significant progress has been made in talks with Moscow about pipeline projects.

During its visit to Russia, Pakistan requested a 30-40% discount on Russian crude oil, but the Russians said they couldn’t offer anything right now because all volumes were committed.

During discussions on gas pipeline projects, Moscow asked Pakistan to honor its commitment to the Pakistan Stream Gas Pipeline (PSGP), which will run from Karachi to Lahore, Punjab.

The Pakistani team proposed changing the PSGP project’s model in their response.

The Russian side stated

The project’s model had already been decided under a GtG (government-to-government) arrangement, with the exception of some clauses of the shareholding agreement, which would be finalized soon.

 

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