The government is considering signing an LNG pipeline deal with Russia

• The ministries said to find solutions to boost bilateral trade.
• Musadik Malik was tasked with considering the options in light of US sanctions.
• Authorities are considering different routes to implement this project.

ISLAMABAD: The coalition government led by Prime Minister Shehbaz Sharif is considering signing a multi-billion liquefied natural gas (LNG) pipeline deal with Russia to address its growing energy needs. The news reported on Thursday.

Islamabad’s move comes after Russian President Vladimir, during his meeting with Prime Minister Shehbaz on the sidelines of the Shanghai Cooperation Organization (SCO) summit earlier this month, proposed building an LNG pipeline through Iran to Pakistan and then its connection with India.

During the meeting, the Prime Minister underlined the possibilities of increasing and strengthening the existing bilateral trade between the two countries and expressed the desire to work closely with President Putin to further strengthen bilateral relations.

The two countries share a bilateral trade worth between 800 and 900 million dollars annually and there is an ambitious plan to increase it to its true potential in the coming years.

Senior official sources told the publication that various ministries are doing internal work and Oil Minister Musadik Malik has been tasked with conducting a study and finding viable options, keeping in mind the sanctions imposed by the United States on Russia and Iran.

The relevant ministries are tasked to assess this potential, taking into account regional and global realities, and find sustainable solutions to promote trade of up to 20-25 billion dollars annually.

Furthermore, different routes are being studied to realize this project, as previous efforts for regional energy connectivity both in the form of power and natural gas have not materialized despite significant promotion in recent decades.

The development of the LNG pipeline comes as Russia’s trade with European countries has fallen by 70%, prompting them to seek new markets, including South Asia.

The two countries also share a history of LNG cooperation, where Islamabad and Moscow had in 2015 agreed to build a 1,100-kilometer (683-mile) pipeline to deliver imported LNG from Karachi to the Arabian Sea coast in power plants in the north-eastern province of Punjab.

Sources said that Islamabad wants to implement the Russian LNG project without competing with the US, so different options are being explored to achieve a win-win situation.

However, a key obstacle to the implementation of this project may be none other than US sanctions – Washington’s main weapon of choice against Russia and anyone who cooperates with Moscow.

Sanctions also threaten another key project, the 1-900km Pakistan-Iran natural gas pipeline. The agreement for the project in question was signed in 2010, but work on it inside Pakistan’s territory has been suspended due to fears of US sanctions.

The pipeline was intended to supply 750 million to one billion cubic feet per day of natural gas for 25 years to meet Pakistan’s growing energy needs.

Therefore, for the LNG project with Russia it seems that Islamabad may have to copy the experience of Turkey, which had entered into such a trade deal without facing the adverse effects of US sanctions.