THE unfortunate timing of Prime Minister Imran Khan’s visit to Russia received plenty of attention as the Ukraine crisis continued to build. As it turned out, the timing was worse than some had feared — Russia’s invasion of Ukraine started the PM was in Moscow. The main reason behind his visit was to advance the Pakistan Stream Gas Pipeline. This long-delayed multibillion-dollar project aims to transport imported LNG from the southern part of the country to major demand centres in the north.
The irony of the visit is that the project’s delay was partly due to Western sanctions following Russia’s annexation of Crimea in 2014. Pakistan asked a company previously attached to the project, a subsidiary of the Russian state-owned tech giant Rostec, to be replaced after it came under sanctions. Following the invasion, the pipeline is at severe risk of further delays following the significantly greater sanctions now imposed on Russia.
In addition, LNG prices are already rising following the invasion, questioning the sense of further LNG infrastructure investment in Pakistan. The two countries signed an initial project agreement on the pipeline in 2015, with Russia providing almost 85 per cent of the financing and operating the pipeline for 25 years. However, the deal couldn’t go forward as planned, as the two countries continued to debate the exact terms of the agreement.
As a result, in May 2021, an amendment to the original Intergovernmental Agreement was signed between the two...
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