Pak-Russia IGC parleys in Moscow from tomorrow

ISLAMABAD: A crucial meeting between top officials of Russia and Pakistan is going to take place on December 2-4 in Moscow at the Inter-Governmental Commission (IGC) level.

The two sides would discuss at length a host of issues including railways connectivity with Central Asian States and Russia from Pakistan, much-touted, but delayed project of $3 billion Pakistan Stream Gas Pipeline (PSGP), and the way forward to expedite bilateral trade.

Russia wants to increase its footprints in Pakistan’s economic, energy and defence landscape under the Inter-Governmental Commission, which was established in 2008 and meets regularly to discuss and implement cooperation agreements in various fields. Since the establishment of the commission, eight meetings have been held so far.

The import of crude oil and LNG at GtG would also be discussed and to this effect, an 11-member delegation, headed by Federal Minister for Power Division Sardar Ahmed Khan Leghari, would reach Moscow on Sunday (today) for two-day parleys.

Secretaries of EAD, Petroleum Division, Power Division, Commerce, and Industries would also be part of the delegation. Additional secretaries of Power Division, Finance, Railways and Industries and Joint Secretary Petroleum Division would also participate on behalf of the Government of Pakistan in the IGC meeting for cooperation in various sectoral issues.

Senior officials of Pakistan Petroleum Limited (PPL), Oil and Gas Development Company Limited (OGDCL), Pakistan Refinery Limited (PRL) and Sui Northern would also attend the two-day IGC meeting.

The Pakistan Petroleum Division would also offer its offshore bloc, which is in shallow water to Russia for Joint Venture in exploration and production activities. Russia would be offered to become part of the upgradation of Pakistan Refinery Limited (PRL) and apart from it, crude oil import for PRL at GtG level would also be deliberated. Russia is most likely to take up the issue of the Pakistan Stream Gas Pipeline (PSGP) earlier named as North-South gas pipeline which was to be laid down from Karachi to Lahore.

The project has been currently in cold storage for many years for many reasons. Right now the gas consumption has tumbled manifold in the country mainly because of the low growth rate and high gas tariffs and the existing national gas network has been facing unprecedented line pack pressure of over 5bcf for many weeks.

However, after the sanctions by the USA, EU, Japan imposed against Russia against its invasion into Ukraine, the talks on $3 billion PSGP are on halt. Pakistan is now hesitant on the advancement of the PSGP project because of the sanctions against Russia. “Both sides earlier tried to finalise the shareholding agreement draft prior to the visit of the then Prime Minister Imran Khan to Moscow, but there were certain thorny issues on which both sides failed to agree. Top leaders of both states wanted to sign the agreement during the two-day visit in February, 2022.

The main challenge for Pakistani businessmen remains how to execute trade deals through banking channels amid the SWIFT sanctions on some Russian companies. Since, India, UAE and, China are engaged in trade with Russia in a big way despite the SWIFT curbs and all the countries involved in it making a huge amount of money out of it. To overcome the hiccups in smooth transactions, there are some proposals under which more licenses are to be issued to Chinese banks in Pakistan which would facilitate Pakistan’s trade with Russia. It may not be out of place to mention here that Russian company LLC “Astarta Agrotrading” and Pakistani firms Meskay & Femtee Trading Company and National Fruit Processing Factory entered into agreements for exchange of goods, including chickpeas, rice, mandarins, potatoes and red lentils under the barter trade deal.

The development took place in the first-ever Pakistan-Russia Trade and Investment Forum held in Moscow in October 2024, becoming a landmark event in bilateral trade relations between Pakistan and Russia. Pakistan and Russia, however, are seriously pondering over LNG transactions in the future as in 2026, the price re-opening clause with Qatar under two long-term agreements under GtG arrangements would be invoked.