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Pakistan signs a gas pipeline agreement with Russian Gazprom

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Pakistan has signed a memorandum of understanding with Russian energy giant Gazprom on Wednesday. The $10 billion agreement was signed to initiate a feasibility study regarding offshore oil and gas exploration activities. The agreement also included setting gas a pipeline that would supply natural gas from Middle East to Pakistan and other parts of South Asia. The agreement shows an improvement of relationship between once cold war adversaries.

 

The agreement was signed between Managing Director Inter State Gas Systems Limited (ISGSL) (a state-owned company of Pakistan) Mobin Saulat and Deputy Chairman Gazprom International of Russia Vitaly A. Markelov. Pakistan is said to import some 500 million to 1 billion cubic feet gas per day from Russia, which would be transported via sea link, as part of the agreement

 

For the past few years, Pakistan has been facing gas crisis, and has started importing liquefied natural gas (LNG) from Qatar and bought supplies from other sources as well. Pakistan also initiated the offshore pipeline talks directly with Iran but did not pursue the project due to U.S. sanctions against Iran and the delicate geopolitical situation with its rival neighbour, India.

 

Gazprom issued a statement on Wednesday saying, “(The agreement) provides for a joint feasibility study regarding gas supplies from the Middle East to South Asian countries.”  Though the company did not specify if Iran or India would be part of the project.

 

Russia has large gas deposits in Middle East countries like Bahrain, Qatar, and other Middle Eastern countries and had offered Pakistan and India gas exports by laying the offshore pipeline that would be passing through Gwadar.

 

Pakistan’s Petroleum Minister Ghulam Sarwar Khan said it would take about three to four years to complete the pipeline project, which would include “other ancillary projects such as Under Ground Gas storage, desalination and other power projects.”

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