Page 9 - AsianOil Week 29 2021

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Company in the 1960s and Pakistan Steel Mills ago with then-Prime Minister Nawaz Sharif,
in the 1970s. but thanks to Western sanctions on Russia’s
Relations between the two states weakened in state-controlled tech Rostec, which was sup-
the 1980s when Pakistan helped the US funnel posed to oversee the project, the project was
military and financial aid to the Afghan muja- frozen.
hedeen against the Soviet-backed government. To circumvent the sanctions, Russia’s stake
But now the relations are warming again as in the project was reduced to 26% from 80%
the attention of the superpowers is refocusing on and Pakistan took a majority stake and right of
Central Asia and tapping its energy resources. operatorship. US sanctions target international
The deal is a boon for Pakistan too, which suffers projects where Russian entities have a 33% or
from an energy deficit. more share.
Pakistan has relied on domestic gas reserves Russia has been actively wooing Pakistan
for power during most of its 74-year existence, recently. Russian Foreign Minister Sergei Lav-
but in the past two decades the country has rov was in Islamabad in April – the first visit of
struggled to raise gas production and upgrade a Russian foreign minister to Pakistan in almost
its energy infrastructure in the face of ris- a decade – to cement ties and broker both the
ing demand from a growing population and energy and arms deals, as well as discuss the sit-
industrialisation. uation in Afghanistan.
Since 2015, Pakistan has mostly bought Now that major fighting has broken out
LNG from Qatar under a long-term contract or in Afghanistan the ties between Moscow and
through spot buying on the international market Islamabad will only get stronger, as Pakistan
to fill the gap between its own production and traditionally maintain close contacts with the
rapidly rising demand. Taliban.
Pakistan suffered a supply shock last month “Russia wants to step up its game in Afghan-
when its LNG terminal was forced to temporar- istan as a diplomatic actor in the Afghan rec-
ily close and a local gas field also went offline. onciliation process, and so Pakistan – with its
The government led by Prime Minister Imran close ties to the Taliban – is a useful partner,”
Khan is trying to fast-track gas infrastructure to said Michael Kugelman, deputy director of
meet future energy demands. Two new LNG ter- the Asia Programme at the Wilson Center, a
minals and underground storage at Port Qasim Washington, DC think-tank. “Russia is moving
in Karachi are being developed and it is hoped closer to China, a key Pakistani ally. And Russia’s
they will go online in the next three years, in long-standing relationship with India is starting
addition to the new Russian-built pipeline. to lose momentum amid deepening US-India
The Pak Stream deal was signed six years ties.”™

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