ISLAMABAD: Russia has agreed to provide crude oil, petrol and diesel to Pakistan at discounted rates besides long-term contracts for LNG supply and construction of gas pipelines, said Minister of State for Petroleum Musadik Malik.
Speaking at a news conference on Monday, Mr Malik, who returned from Moscow visit, said that detailed terms and conditions of the discounted oil commodities would be settled during the upcoming visit of Russian Energy Minister to Islamabad by mid-January, but rates would be similar to the discount being given to other countries or even cheaper.
Before that visit, the two sides would crystallise proposals to a stage that an executive summary or an agreement could be signed and supplies start flowing, the minister said, adding that both sides would designate respective firms to negotiate terms and conditions.
He said the Russian government also facilitated Pakistan’s discussions with one of its private firms for supply of Liquefied Natural Gas (LNG) since its public sector entities were short of the commodity at the moment. However, they advised Pakistan to set the ball rolling for the long-term LNG contracts on G2G basis for supplies to begin in 2025-26 since it was currently working on new LNG facilities.
The minister said his Russian visit was more successful than expected as it entailed cheaper crude, petrol and diesel, beginning of talks for LNG supply in the private sector and discussions on long-term LNG contract and flexibility on North-South Pipeline and another future pipeline.
He said the Russian side was very interested in long-delayed North-South Gas Pipeline from Karachi to Lahore – PakStream – and another big pipeline for another international gas pipeline provided there are no international sanctions.
He said although no formal agreement existed on PakStream, Pakistan requested some flexibility because of domestic constraints.
Mr Malik said Pakistan required at least 8-10pc growth in energy supply if it were to achieve 5-6pc economic growth rate to provide employment to its growing young population coming out of the country’s universities, but it was ironic the previous government blocked such initiatives with a narrative of surplus energy.
The minister lamented that the global fabric that had been discouraging coal-based power plants in Pakistan and investing in renewables, had not waited to open up its own coal-based power plants when difficulties emerged after the Russia-Ukraine war. Therefore, Pakistan would also have to look after its own interests while following international principles and national integrity, and to go forward to meet the country’s demands and solve the energy problems, he said.
Talking about the Russian offer to start negotiations for long-term contracts of LNG procurements, the minister said Pakistan had previously signed contracts with Qatar for LNG.
“Keeping these agreements in mind, we would try to sign new contracts on a G2G basis, and negotiations have already begun for this purpose,” he said.
Iran’s LPG donation
Mr Malik said that Iran would also donate liquefied petroleum gas (LPG) worth £2 million to Pakistan on humanitarian basis and these quantities would reach the country within the next 10 days and help meet increasing demands for gas in December and January.
He said the country’s local gas reserves were depleting by 8 to 9pc annually, adding that the gas supply situation was being monitored on a daily basis and gas companies had been instructed to ensure gas supply during cooking hours 6:00am to 9:00am; 12:00am to 2:00pm and 6:00pm to 9:00pm at all costs.
Published in Dawn, December 6th, 2022