Deputy PM Overchuk due tomorrow: G2G pacts to be inked with Russia

ISLAMABAD: Pakistan and Russia are all set to ink a number of pacts on G2G with regard to trade, energy, finance and industry during the visit of Deputy Prime Minister of the Russian Federation, Alexey Overchuk on September 18-19, 2024, well-informed sources told Business Recorder.

This would be the highest level visit from an official of the Russian Federation, after a number of years, and a follow up of discussions between Prime Minister Shehbaz Sharif and Russian President Vladimir Vladimirovich Putin on the sidelines of SCO Summit in Astana (Kazakhstan) on July 3, 2024.

According to sources, Deputy Prime Minister will be accompanied by several Deputy Ministers of the Russian Government.

PM Shehbaz seeks barter trade revival with Russia in meeting with Putin

With reference to the 4th meeting of the Committee for Development of a Roadmap for Engagement with Russia held on 19 July 2024 following are some proposals for G2G basis cooperation with Russia. A comprehensive report on B2B sector/commodity specific cooperation is being shared separately by the Mission’s Trade Wing.

The three pronged strategy for Pakistan-Russia energy cooperation outlined last year is as follows: (i) procurement of crude oil;(ii) procurement of LNG; and (iii) development of gas infrastructure in Pakistan.

Sharing details about procurement of crude oil, the sources said, Pakistan successfully imported crude oil from Russia last year with an initial shipment of 100,000 metric tons. Prime Minister Shehbaz Sharif termed the day of the arrival of the Russian cargo ship as a ‘transformative day’’.

Russian side accepted a non-confirmed Letter of Credit (LC) for the procurement at that time, with none of the other major oil suppliers providing this flexibility.

Procurement of oil from Russia on a B2B basis has been undertaken by Cnergyico in Pakistan. Payments were made in Yuan through Chinese banks, however, import of crude oil is suspended due to non availability of banking channels. Government is working on various proposals to resolve this.

On October 13, 2023 Caretaker Minister for Energy and Petroleum, now SAPM, Muhammad Ali during a visit to Moscow for ‘Russia Energy Week’ along with his delegation witnessed the signing of a B2B agreement between Pakistan Refinery Limited and Russian company JSC Promsyrioimport for a monthly supply of fifty thousand tons of crude oil,

Pakistan’s embassy in Moscow has requested Islamabad that implementation of the agreement may be looked into. During the Summit meeting on 3rd July President Putin expressed an interest in increasing oil supplies to Pakistan.

Pakistan Embassy suggested looking into a long term agreement of supply of crude oil from Russia, if it proves economically beneficial on G2G basis.

Procurement of LNG: Russian company RusChemAlliance (RCA) is ready to sign two separate framework agreements with Pakistan LNG Ltd (PLL) for supply of LNG to Pakistan as spot cargo and long term basis (starting from 2027). RCA has conveyed that both agreements are sanctions compliant, non-binding and offer competitive prices. Russian side has shared proposals on stages of gas infrastructure development in Pakistan.

The government is likely to revisit its strategy on Pakistan Stream Gas Pipeline Project as the crucial issues in the project to be addressed include financing and identifying a gas source.

Russia has also proposed working on a pipeline from Iran towards Pakistan and even further on to India; Russian side during discussions last year in the energy week conveyed that it had discussed this proposal with India; the idea was to produce an agreement between the two neighboring countries akin to the Indus Water Treaty and that India was ready to discuss this idea further.

Copyright Business Recorder, 2024