Russia ready to offer coal, not LNG

ISLAMABAD: Russia has reportedly declined to sell Liquefied Natural Gas (LNG) to Pakistan on short notice but is ready to offer coal, well informed sources in Ministry of Energy (Petroleum Division) told Business Recorder.

Pakistan’s Minister of State for Petroleum wrote a letter to Russian Minister for Energy last month and showed an interest in purchase of LNG from Russia ostensibly to meet energy requirements in winter months. Recently, Pakistan ambassador to Russia, Shafqat Ali Khan met with the Russian Minister for Energy to handover the letter of October 11, 2022 written by Minister of State for Petroleum on the subject of procurement of LNG from Russia.

In response, the Russian side said LNG contracts were made on a long-term basis and arranging them at short notice was difficult, however, they would positively consider Pakistan’s request, the sources added.

In 2020, Russia held proven reserves of 37.4 trillion cubic meters of natural gas - up from 34.1 cubic meters recorded a decade ago.

Referring to the discussion between Prime Minister Shehbaz Sharif and Russian President Vladimir Vladimirovich Putin, in their meeting in Samarkand on September 15, the Russian Energy Minister inquired if Pakistan’s request for procurement of coal from Russia still stands.

According to the Ministry of Natural Resources, Russia’s coal reserves are located within 22 coal basins and 146 separate deposits. More than half of the total reserves are brown coal - 146 billion tons. Bituminous coal accounts for 120.4 billion tons, of which 50.1 billion tons are suitable for coking.

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The sources further stated that Russian Embassy in Islamabad in a letter on October 28, recommended that in the 8th session of the Russian-Pakistan Intergovernmental Commission (IGC) on Trade, Economic, Scientific and Technical Cooperation to be held on January 18-20, 2023 in Islamabad the issue related to energy sector would come under discussion.

The eight session of IGC will be co-chaired by Sardar Ayaz Sadiq from Pakistan’s side and Nikolay Shulginov, Minister for Energy from Russian side. In this regard, inter-ministerial meeting (IMM) regarding follow up on implementation of the decision taken during seventh session of IGC under the chairmanship of Additional Secretary-1, Ministry of Economic Affairs is scheduled to be held tomorrow (November 16).

Pakistan is trying to strike a deal with Russia for import of oil but still nothing concrete has come out from interactions between the two countries. Pakistan is also importing wheat from Russia through Trading Corporation of Pakistan (TCP) on G2G basis.

During the last IGC meeting, Russians had 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 had 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 upgrade; (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).

Copyright Business Recorder, 2022