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Friday, July 19, 2024  
12 Muharram 1446  

Russia proposes Iran swap for gas supply to Pakistan

Two Russian deputy prime ministers speak about the future, say Pakistan and Africa are emerging markets
Russian President Vladimir Putin and Prime Minister Shehbaz Sharif in a discussion during the Shanghai Cooperation Organization summit on September 16, 2022. Photo via Twitter/PM Office
Russian President Vladimir Putin and Prime Minister Shehbaz Sharif in a discussion during the Shanghai Cooperation Organization summit on September 16, 2022. Photo via Twitter/PM Office
Russian Deputy Prime Minister Alexander Novak in a file photo. Photo via Russian news agency/TASS
Russian Deputy Prime Minister Alexander Novak in a file photo. Photo via Russian news agency/TASS
Russian Deputy Prime Minister Alexey Overchuk. Photo via Russian news agency/TASS
Russian Deputy Prime Minister Alexey Overchuk. Photo via Russian news agency/TASS

In the long-term, Moscow can send its natural gas to the markets of Afghanistan and Pakistan, either using the infrastructure of Central Asia, or in a swap from the territory of Iran, a Russian deputy prime minister told state TASS news agency.

“If we talk about a deeper perspective, then this is the export of gas to Afghanistan, Pakistan: either using the infrastructure projects of Central Asia, or in a swap from the territory of Iran. That is, we will receive their gas in the south of the country, and in exchange we will supply gas to the north for Iranian consumers,” he said.

“Moscow is also discussing higher supplies of its gas to Kazakhstan and Uzbekistan,” Alexander Novak was quoted as saying in remarks published by the agency on Sunday.

Another Russian Deputy PM Alexey Overchuk told the Rossiya-24 TV channel on Thursday that the economic power centers, as they were called, are moving from the West to the East and the economies of the global South in particular, such as India and China, will be developing, while Pakistan and Africa are starting to develop. “Those all are emerging markets and fundamentally, those are markets where countries friendly to us are located. And of course, we should develop transport and logistic ties that will connect Russia and the EAEU to those countries, given the new realities.”

The statements came two weeks after Petroleum Musadiq Malik said that Moscow would provide crude oil, petrol, and diesel to Pakistan at discounted rates, which are offered to any country in the world.

An inter-governmental commission of Russia, led by its energy minister, would visit Pakistan in January, as part of the negotiations the minister had during his trip to the energy-rich country. Pakistan would try to finalise it for an agreement or an executive summary.

“The Russian government is setting up new factories for the production of LNG and they have invited Pakistan to begin talks on long-term contracts for 2025 and 2026,” Malik said on December 5, adding that Pakistan has started talks with private companies for LNG.

In a wide-ranging interview with the TASS agency, parts of which have been published throughout the weekend, Novak also said that Russia has agreed with Azerbaijan to increase gas supplies for its domestic consumption.

He explained that the country was creating the so-called North-South corridor and they were making it modern and convenient. “We are planning the reconstruction of the railway, in fact, the construction of 160 missing kilometers between the border of Azerbaijan and the Iranian city of Rasht. With the construction finished, the so-called western corridor or the western route of the North-South corridor will be a full-fledged railway, and we will have rail access to the Iranian ports of the Persian Gulf.”

“In the future, when they increase gas production, we will be able to discuss swaps,” he said.

To meet its energy needs, Pakistan is also working with Azerbaijan pertaining to gas. Both sides were exchanging the draft of the framework agreement under which SOCAR—one of the leading trading firms of LNG—would find and give distressed and unsold cargo to Pakistan.

“We will have the right to whether accept or reject it on the given rate,” Malik said. Under this deal, Pakistan can get LNG on a government-to-government basis. Moreover, the government has boosted its commitment to reviving the Turkmenistan–Afghanistan–Pakistan–India (TAPI) Pipeline and set up a Special Strategic Cell in the ministry under which the country will get “1.3 million cubic feet of cheap gas”.

“We will have the right to whether accept or reject it on the given rate,” Malik said. Under this deal, Pakistan can get LNG on a government-to-government basis.

Russia is also ready to resume gas supplies to Europe through the Yamal-Europe Pipeline, the deputy prime minister said.

“The European market remains relevant, as the gas shortage persists, and we have every opportunity to resume supplies,” he said, “For example, the Yamal-Europe Pipeline, which was stopped for political reasons, remains unused.”

The Yamal-Europe Pipeline usually flows westward, but has been mostly reversed since December of 2021 as Poland turned away from buying from Russia in favour of drawing on stored gas in Germany.

In May, Warsaw terminated its agreement with Russia, after earlier rejecting Moscow’s demand that it pays in roubles.

Russian supplier Gazprom responded by cutting off supply and also said it would no longer be able to export gas via Poland after Moscow imposed sanctions against the firm that owns the Polish section of the Yamal-Europe pipeline.

Novak also reiterated that Moscow is discussing additional gas supplies through Turkey after a creation of a hub there. He also said that Moscow expects it will have shipped 21 billion cubic metres (bcm) of liquefied natural gas (LNG) to Europe in 2022.

“This year we were able to significantly increase LNG supplies to Europe,” Novak said. “In the 11 months of 2022 they increased to 19.4 bcm, by the end of the year 21 bcm are expected.”

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