New Milestone Set in Pakistan-Russia Relations
Rapidly changing geopolitics are having a deep impact on this Region. Nations are aligning their interests, partners, foes, and friends. The convergence of interests has brought Pakistan and Russia closer. Both countries are victims of the Western World's sanctions, isolations, and stepmother attitude, forcing Pakistan and Russia to come closer and face imposed challenges together.
Regional nations have to collaborate with each other and protect themselves from Western World's aggressive policies and coercion. The Region is united under BRI and SCO umbrella. Bilateral ties are also strengthening in the whole Region.
Russia and Pakistan are cooperating in many aspects, especially on the economy, trade, and investments. The recent deal reached between Pakistan and Russia to build a significant gas pipeline linking Pakistan's southern port of Karachi to industrial hubs Lahore. The agreement is one of the largest deals worth above US Dollars two billion between Moscow and Islamabad since the 1970s. The Last big deal was Pakistan Steel Mill, Karachi, in the 1970s.
The North-South Gas Pipeline that has now been retitled as "Pakistan Steam Gas Pipeline", is a flagship project the two countries expect to undertake ever since they decided to bury their Cold War rivalry and enter into a new era of bilateral ties.
The agreement was initially signed in 2015, but because of possible US sanctions on the Russian companies and other issues, the work on the 1,122-kilometre-long pipeline could not be initiated. The project, which has an estimated cost of $2.25 billion, would involve the establishment of a Special Purpose Vehicle (SPV) company operated jointly by Pakistan's Inter State Gas Systems and several Russian firms, including the TMK – a company that is one of the world's leading steel pipe suppliers for the oil and gas industry, doing business in Russia, the US, and Canada, among other nations.
However, the two sides finally overcame those obstacles and signed an amended agreement that would now give 74 percent stakes in the pipeline to Pakistan.
The project is vital for Pakistan's economy and may enhance economic activities tremendously. The Industry is scattered around Lahore, which needs massive Gas for its fuel needs. Trucking may be an uneconomically infeasible option. The supply of Gas by the proposed pipeline will boost industrialization rapidly. The pipeline would connect liquefied natural gas terminals in Karachi and another port city, Gwadar, with power plants and industrial hubs in Pakistan's northern region of Punjab, which includes the city of Lahore.
It is worth mentioning that Pakistan is a country with energy deficiency and depends on imports. At the same time, Russia is an Energy-rich country and a net exporter of Energy. Russia has achieved advanced technologies in producing Energy, transportation, distribution, and managing. The project will be beneficial for Pakistan in the form of investment as well as the transfer of technology. In the future, Russia may supply LNG to fuel-hungry Pakistan.
The project not only has economic but strategic significance for Pakistan, but Pakistan also wanted to broaden ties with Russia as part of its efforts to diversify its foreign policy options. Both countries were engaged and exploring all-dimension cooperation. Pakistan has invited President Putin to visit Pakistan. Foreign Ministries of both countries are working closely to finalize his visit. In April, Russian Foreign Minister Sergey Lavrov visited Islamabad after a gap of almost 9 years. During the visit, he conveyed a message to Pakistani leadership on behalf of President Putin that Moscow is willing to extend all possible help to Islamabad. Both sides are working on the visit of the Russian president to Pakistan. Prime Minister Imran Khan has already extended a formal invitation to President Putin.
However, diplomatic sources say Putin wants to undertake a visit when he has something significant to sell. With the signing of the Pakistan Steam Gas Pipeline agreement, the prospects of Putin visiting Pakistan have brightened significantly. Pakistan is keen that President Putin inaugurates the groundbreaking of the gas pipeline project, which may kick off later this year or early next year. The likely visit of President Putin will be the culmination of years of efforts by two sides to open a new chapter in their ties.
The Pakistan Stream remains a flagship project in bilateral cooperation between Russia and Pakistan, and both nations consider a new milestone in the bilateral relations between the two countries. It will pave the way for many more cooperations and encourage entrepreneurs to strengthen more collaborations. Russia has earlier shown interest in Turkmenistan –Afghanistan-Pakistan Pipeline, long-pending due to instability in Afghanistan. After the Karachi-Lahore Pipeline project, the priority may be the Turkmenistan-Pakistan pipeline, as the situation in Afghanistan is expected to improve soon.