Russia Seeks New Gas Markets in South Asia

 

Russia is turning to South Asia for new customers to buy its natural gas. Projects take in the construction of a pipeline to carry natural gas across Pakistan, and a plan to co-develop Siberian gas fields with India.

Pakistani Prime Minister Shahid Khaqan Abbasi is believed to have discussed the gas pipeline plan with Russian officials during a Shanghai Cooperation Organization heads of government meeting in Sochi, Russia, in early December.

Pipeline talks

The pipeline dialogs have not been confirmed by the Pakistani foreign ministry. But it is understood that agreement was reached during a Russia-Pakistan bilateral meeting or the sidelines of the conference.

“Pakistan and Russia are set to ink agreements this week on laying an offshore gas pipeline and the North-South liquefied natural gas pipeline,” the Express Tribune, a Pakistani newspaper, reported on Dec. 24.

The $2 billion “North-South pipeline,” which was agreed in outline in 2015, will run for 1,100km between the Lahore and Karachi. Russian LNG imported through Karachi port will be delivered to power plants near Lahore.

Gas Pipe Line

To win the hearts of voters ahead of a general election in 2018, Pakistan’s ruling party, the Pakistan Muslim League-Nawaz, is seeking to boost the country’s electricity provision and reliability in response to chronic complaints about lack of power.

A quarter of Pakistan’s 200 million people have no electricity, and blackouts remain frequent in electrified areas. Pakistan relies on gas thermal generation for 26% of its power, and many of its new power plants use gas generation, along with coal-based thermal and nuclear plant.

The project stalled when RT Global Resources, a Russian infrastructure company that is a subsidiary of Rostec, a Russian defense, and technology corporation.

However, the pipeline’s capacity of 1.2 billion cubic meters a day is expected to significantly boost Russia’s natural gas sales.

Russia’s sales efforts in South Asia also include a project to build an offshore pipeline linking Pakistan with an Iranian gas field where it holds concessions. The offshore pipeline could also be extended eastward to India.

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