Pakistan imports Russian gas
Published by Sara Simper,
Editorial Assistant
World Pipelines,
Gas talks between Russia and Pakistan began back in 2015 when they both announced the start of the long-delayed Pakistan Stream Gas Pipeline project (PSGP), formerly known as the North-South Gas Pipeline or PakStream. Russia proposed to construct a pipeline to transport LNG from the southern port city of Karachi to Pakistan’s north. However, Pakistan and Russia’s North-South Gas Pipeline Project faced challenges. In 2016, the US imposed sanctions on RT Global, a Russian company that was nominated to carry out the construction of the pipeline. RT Global was also a major shareholder in the project. Despite changing the ownership structure later in 2021 to reflect Pakistan as the only major stakeholder in the project to avoid any violations of sanctions, the project has remained in limbo.
Russia’s invasion of Ukraine upended the global natural gas market. Europe’s efforts to replace Russian gas supplies have exacerbated price spikes for buyers around the world. In particular, such developments are putting significant pressure on South Asian countries like Pakistan, whose economies are heavily dependent on gas but are struggling to obtain it at an affordable price.
For Pakistan, natural gas makes up 50% of its total energy supplies, and the country relies on gas for a third of its electricity output. Against this backdrop, Islamabad has drifted closer to Moscow in recent years, in part because the government has been looking for ways to shore up the country’s energy security.
In June 2023, Russia sent gas supplies to Pakistan through Uzbekistan and Afghanistan for the first time. A convoy of 10 trucks carrying LPG entered Pakistan via the Torkham border crossing from Afghanistan. The Russian LPG imports were allegedly obtained at a discount and the transaction was completed in Chinese yuan, according to Pakistani Petroleum Minister, Musadik Malik. However, Russian Energy Minister, Nikolai Shulginov refuted Malik’s claim and stated that Pakistan did not get a special discount. This was part of a deal between the two countries for 110 000 t of LPG.
While Pakistan initially described this as a trial run, later Pakistan’s Petroleum Minister said that it aims to meet one-third of its oil import needs with Russian crude.
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