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Wednesday, April 24, 2024  
15 Shawwal 1445  

Pakistan, Russia to develop financial infrastructure

Consensus was evolved at the 7th Session of Pak-Russia Intergovernmental Commission on Trade, Economic, Scientific and Technical Cooperation
Both sides resolved to recommend to their central banks to hold consultations about connecting Pakistani financial institutions to SPFS to engage in secure exchange of financial information with its Russian partners, sources said. File
Both sides resolved to recommend to their central banks to hold consultations about connecting Pakistani financial institutions to SPFS to engage in secure exchange of financial information with its Russian partners, sources said. File

By Mushtaq Ghumman

Pakistan and Russia have reportedly agreed to develop bilateral financial infrastructure through their central banks aimed at facilitating trade, investment activities, etc, well informed sources told Business Recorder.

This consensus was evolved at the 7th Session of Pak-Russia Intergovernmental Commission on Trade, Economic, Scientific and Technical Cooperation held recently in Yekaterinburg city of the Russian Federation. Pakistani side was led by Minister for Economic Affairs, Omar Ayub Khan.

According to sources, Pakistan side expressed interest in connecting to the financial messaging system of the Bank of Russia (SPFS). Both sides resolved to recommend to their central banks to hold consultations about connecting Pakistani financial institutions to SPFS to engage in secure exchange of financial information with its Russian partners.

The Commission recommended that the Bank of Russia and the State Bank of Pakistan should render their assistance in developing the Russian-Pakistani financial infrastructure (in particular with regard to correspondent banking relationships, as well as, establishing branches and subsidiaries on a reciprocal basis), provided that banks and financial development institutions are interested in such assistance.

Energy Sector: Both governments would make all possible efforts to facilitate the implementation of the “Pakistan Stream” project.

The two sides agreed to follow the arrangements specified in the protocol of amendment to the Intergovernmental Agreement of May 28, 2021 and the main terms and cooperation for the project (Head of Terms) of July 15, 2021.

The two sides have developed the “discussion draft” of the Shareholders Agreements for the Special Purpose Company (SPC) for construction of the “Pakistan Stream” gas pipeline project and will take it to the final level through mutual consultation.

The two sides agreed to sign the Shareholders Agreement and Facilitation Agreement for the “Pak Stream” gas pipeline by February 15, 2021; and agreed to sign statutory documents of the Special Purpose Company (SPC) for the construction of the “Pakistan Stream” gas pipeline by January 31, 2022.

The Commission noted the interest of the Russian and Pakistan sides to continue interaction in order to explore the opportunities and prospects for mutually beneficial cooperation in oil and gas sector in Pakistan and third countries including implementation of prospective joint projects in gas exploration and production.

The Commission noted the proposal from the Russian side to Pakistani side to study prospects of implementation of the system of Production of Facilities Monitoring (SPFM) software, developed by Gazprom EP International BV, for oil and gas fields’ production facilities in Pakistan.

The Commission noted the interest of Pakistan Petroleum Limited (PPL), Oil and Gas Development Company Limited (OGDCL) and Mari Petroleum Company Limited (MPCL) to work jointly with Russian oil and gas companies in offshore and onshore ventures of Pakistan, as well as, outside Pakistan.

The Commission noted that both sides wished to continue interaction including the implementation of prospective joint projects in pipeline construction.

The Russian side agreed to the Pakistan side proposal for consideration of its mineral resource sector (copper, gold, iron, lead, and zinc ores of Balochistan, KP and Punjab) for technical/ economic cooperation and investment and constitution of a sub-working group comprising of mineral sector experts of the two countries to identify possible areas of cooperation/ investment particularly upgradation of basin survey and data management.

The Russians informed the Pakistani side about the interest of the Russian company Digital Industrial Platform LLC (a joint venture of Gazprom Neft PJSC and Zyfra LLC) in developing fruitful cooperation with Pakistani oil & gas companies including but not limited to OGDCL, PSO, SNGPL and SSGCL in implementing and jointly developing and marketing the industrial digital solutions for oil & gas sector. The two sides also supported an interest of Habib Rafiq Engineering (Pvt.) LTD and its subsidiaries or associates to cooperate with Digital Industrial Platform LLC (a joint venture of Gazprom Neft PJSC and Zyfra LLC) in jointly exploring the opportunities for developing, marketing and implementing the industrial digital solutions for oil & gas sector in the Pakistani market on open industrial IoT platform.

The Commission noted that PSO also floats tenders for import of LNG from time to time and is looking forward to the participation of Russian companies in future tenders.

The Commission noted the proposal of Pakistani side to explore possibilities for investment in Pakistan by Russian Companies in: (i) setting up of refineries; (ii) existing refineries upgradation; (iii) virtual LNG pipelines; (iv) onshore storage of LNG; (v) strategic oil storages; and (vi) strategic gas storages (under this point the Pakistan side will consider the proposal from the Russian side to develop underground gas storages in continuation of the “ Pakistan Stream” project).

Both sides noted the need to develop bilateral cooperation in the field of hydropower and renewable energy sources; and supported the interest of power Machines JSC to participate in the bidding process of electro- mechanical works for the construction of the second stage of the Dasu HPP, as well as, to participate in other prospective projects in the power industry of Pakistan.

Pakistan eyes stronger economic ties with Russia through PSGP project

The Russian side confirmed its interest in supplying and after-sales service of Russian civil aircrafts of interest to the Pakistani state and commercial organizations subject to compliance with ICAO standards and PCAA rules and regulations.

The Russian side noted that Ulyanovsky Avtomobilny Zavo LLC (UAZ LLC) is interested in supply of assembled vehicles for state and private customers and implementation of the vehicle assembly project (DKD/SKD) kits) in Pakistan. The Russian side will share the details on supply of assembled vehicles for state and private customers.

The Russians further indicated the interest of the Russian company Almaz-Antey JSC in supplying air navigation and air space control systems, weather radar, medical equipment, etc. to Pakistan.

The Russian Side informed the Pakistan side about the interest of the Russian company Azimut JSC in promoting navigation surveillance and communication systems of civil airfields, air navigation equipment and access control systems to Pakistan.

The two sides noted that the current volume of bilateral trade did not correspondent to the existing potential. According to the Federal Customs Service of Russia, in 2020, the Russian-Pakistani trade turnover increased by 45.8% compared to 2019 to $ 789.8 million. In this regard, the two sides agreed to continue joint efforts to strengthen Pakistani-Russian cooperation in the field of trade and investment.

The two sides agreed to take necessary measures to expand access to mutual markets in order to significantly increase the volume of bilateral trade.

The Russian side expressed concern over the introduction of an anti-dumping duty on Russian phthalic anhydride, which resulted in stopping Russian phthalic anhydride exports on June 5, 2021. The Pakistan side highlighted that the investigations were conducted and anti-dumping duties were imposed in accordance with the provisions of the WTO’s Anti-Dumping Agreement.

Both sides agreed to encourage their investors to transfer technologies to Pakistan and Russia, and set up Joint Ventures in areas of mutual interest including SEZs and other similar formations.

In order to establish legislative grounds for the development of customs cooperation between Pakistan and Russia, the two sides agreed to continue joint work aimed at signing the following documents: (i) agreement on cooperation and mutual assistance in Customs Matters; (ii) protocol between the Federal Customs Service (Russian Federation) and FBR on exchange of documents and data on customs value of goods transported between the two countries; and (iii) protocol between Russian Customs Service and TDAP (Pakistan’s Commerce Ministry) on administrative cooperation, information exchange and mutual assistance under the unified system of tariff preferences of the Eurasian Economic Union.

The story was originally published in Business Recorder on December 21 2021.

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