Pakistan has agreed to work with Russia on a pipeline project

Pakistan has agreed to work with Russia on a pipeline project

Shafqat Ali Khan, Pakistan’s ambassador to Russia, said his government is committed to the Pakistan Stream gas pipeline project with Moscow, and that legal consultations between the two countries are underway. This comes despite a drop in Russian energy exports due to the crisis in Ukraine. Last Monday, the European Union imposed an embargo on Russian oil imports into the EU, thus cutting off a major source of money for Russia. “At this time, the exact date [when the project will be completed] is unknown. There are a number of legal problems to consider. There aren’t any major issues. Both countries are committed to this project in terms of political will.”

Last week, the Pakistan government determined a 45 per cent increase in the prescribed prices of natural gas for the 2022-23 fiscal year to meet the revenue requirements of the two gas utilities. After the hike in petroleum products prices, the Oil and Gas Regulatory Authority (OGRA) has approved the hike in gas prices for Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines Limited (SNGPL).

Pakistan Stream Gas Pipeline Project, stretching from Sindh to Punjab, is a 1,100-kilometre gas pipeline. The USD 2.5 billion project, which was first signed in 2015, is tentatively slated to begin in 2023. Russia is the world’s second-biggest producer of natural gas while Pakistan is energy scarce country. With the declining gas reserves, Pakistan faces a major supply problem as gas still makes up a substantial part of its energy mix.

The gas price hiked up to 44 per cent for SSGC consumers and 45 per cent for SNGPL consumers. After the hike, the new gas price for SSGC consumers was fixed at Rs 1007 with an increase of Rs 308.53 and the new price for SNGPL consumers was fixed at Rs 854.52. The new gas prices will come into effect from July 1 following a notification to be issued by the federal government.

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