INTERACTION DESK
Russia is widely referred to as an “energy superpower” and is the world’s leading natural gas exporter and second-largest oil exporter. Russia, like any other oil/gas producer, needs to find new markets for its energy products. Pakistan is facing a gas shortage, and has already established itself as a viable energy consumer. According to reports, Pakistan has a gas shortfall of 1.5 billion cubic feet per day, which is expected to double by 2025. Authorities have estimated that domestic gas supplies will drop from 3.51 bcfd in 2019 to 1.67 bcfd in 2028, necessitating an increase in LNG imports to meet demand. The country began importing LNG in 2015 to mitigate a growth in consumption and to reduce oil imports. It is also reported that over a mere six years, Islamabad has become the world’s ninth-largest LNG importer. Qatar is presently Pakistan’s biggest gas supplier, and the latter is still looking for more energy partners to cooperate with. In June 2021, Pakistan secured US$4.5 billion (S$ 6.12 billion) worth of financing from the Islamic Trade Finance Corporation to cover the cost of importing crude, petroleum and LNG. With the signing of a “shareholders’ agreement” in July 2021, Russia and Pakistan have outlined the roadmap for future cooperation, including the construction of a US$2.5 billion (S$3.4 billion) natural gas pipeline in Pakistan. This project is a part of a Russian investment package worth of US$14 billion (S$18.7 billion) in Pakistan’s energy sector promised in 2019. Russia’s determination to establish long-term economic and trade relations with Pakistan demonstrates strong political decision making by President Putin and his team. Pakistan’s pursuit in energy and trade sectors remains the most crucial element as it is rapidly establishing its economic footprints in partnership with China’s Belt and Road Initiative. Russia’s strategic need to structure a balanced trajectory of relations with all its neighbors in Asia brings the two countries together. The news that has been in the newspapers with the heading or columns “Pakistan buys Russian oil but sees diversified future” Pak-Russia energy diplomacy, Fast track development on Russo-Pak Energy corridor used for Pak’s economic stability and the President SAARC chamber of Commerce and Industry Mr. Iftekhar Ali Malik hails govt’s decision of importing crude oil from Russia in currencies of friendly countries as mutually agreed by the two countries. This action will ease dollar’s pressure on Pakistan as Pakistan would like to import 35% of its total crude oil requirement from Russia. Mr. Iftekhar further said that recent decision of the government was also a good one for direct settlement and clearing in RMB between China and Pakistan which will help balance greatly the possible trade fluctuation caused by changes in US dollars. Development communication net work’s Pakistan Executive Director Munir Ahmed said: A comprehensive Russo-Pak Energy Corridor is very crucial for both countries at this point. Strangely, overlooking the sacrifices of about seventy years, the US has left Pakistan in isolation for siding with China in the new US-NATO cold war against Pakistan’s iron friend. Russia, on the other hand, is facing a difficult battle to defend a Moscow-leaning Ukraine that has been seized by US-puppet presidents since the so-called “Revolution of Dignity,” prompted by US touts. That revolt compromised the honor of common Ukrainians. While the Russian Federation defends its friends in Ukraine, the US and the West have destroyed Ukraine and frozen $330 billion in the Russian government and citizen assets. Munir Ahmed said that the time is ripe for both the countries to think about the larger and more comprehensive Russo-Pak Energy Corridor (RPEC), similar to the China-Pakistan Economic Corridor (CPEC). Both corridors can help Pakistan have historic economic growth and prosperity, while the country can also play its backbone role in the regional economic bloc. Whoever takes it up will be the hero of the nation and the region too. In Pakistan, it seems that time has come for growing Pakistan and Russia trade relations on faster track.