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Government Mulls Over Signing LNG Pipeline Agreement With Russia

Government Mulls Over Signing LNG Pipeline Agreement With Russia

The Shehbaz Sharif-led coalition government in Pakistan is considering entering into a significant liquefied natural gas (LNG) pipeline deal with Russia to address its growing energy demands, as reported by The News on Thursday.

This move follows discussions between Russian President Vladimir Putin and PM Shehbaz during the Shanghai Cooperation Organisation (SCO) summit, where Putin proposed constructing an LNG pipeline through Iran to Pakistan, potentially extending to India.

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During their meeting, PM Shehbaz emphasized the potential for expanding bilateral trade and expressed a desire to strengthen ties with President Putin.

Bilateral trade between Pakistan and Russia currently stands between $800 to $900 million annually, with ambitions to increase it significantly in the coming years.

Government sources indicate that various ministries are conducting internal assessments, with Minister for Petroleum Musadik Malik tasked to study viable options, considering US sanctions on Russia and Iran.

Efforts are underway to explore routes and logistical aspects of the project, amid historical efforts to enhance regional energy connectivity.

The initiative is driven by Russia’s shift towards seeking new markets, including South Asia, amidst reduced trade with Europe.

While Pakistan aims to proceed with the LNG project with Russia without antagonizing the US, challenges include navigating sanctions that have also stalled progress on the Pak-Iran gas pipeline.

Like Turkey, Islamabad may need to navigate US sanctions strategically to advance the LNG agreement with Russia.