The import of gas from Russia is still a distant dream for Pakistan despite the two countries’ willingness to play ball.
Analysts say the renewed discussion around gas imports from Russia won’t amount to much — at least in the short term — for two reasons. One, lack of infrastructure to handle gas imports; and two, inadequate capacity in the existing pipeline system to transport gas from one point to another.
“Gas wouldn’t start flowing anytime soon even if we bought it today. The infrastructure isn’t there. The issue has to be addressed on a long-term basis,” said Tahir Abbas, head of research at brokerage Arif Habib Ltd, while speaking to Dawn on Tuesday.
Russian Deputy Prime Minister Alexander Novak told the press on Monday Russia was willing to sell natural gas to Pakistan through the “infrastructure of Central Asia or in a swap from the territory of Iran”.
Russia has been trying to diversify its energy buyers as it faces increasing global isolation following the invasion of Ukraine in February. One of the largest energy producers, Russia’s share in the global gas export market is around one-fifth.
A Russian delegation headed by its energy minister is due in Islamabad next month. Minister of State for Petroleum Musadik Malik recently told journalists that Pakistan was already in talks with private and state-owned Russian firms for the import of liquefied natural gas (LNG).
But the current LNG import infrastructure has excess capacity to handle only a few odd cargoes carrying gas of “200-300 million cubic feet per day (mmcfd)”, said Mr Abbas.
Pakistan has made little progress to expedite the construction of two long-overdue LNG terminals — Qatar-backed Energas LNG and Mitsubishi-backed Tabeer LNG. Each of the two terminals will have capacities of 750-1,000mmcfd.
Given the capacities of the two already operational terminals — Engro Elengy (690mmcfd) and GasPort LNG (750mmcfd) — the addition of the two “merchant” sites is supposed to more than double the country’s LNG import capacity.
Despite vociferous protests by the two terminal sponsors, there’s been little tangible progress from the state-owned gas utility companies on the allocation of 300mmcfd of pipeline capacity to each of them.
As for gas imports through Central Asian infrastructure (i.e. pipelines) that the Russian deputy prime minister referred to a day ago, analysts believe the proposal can only be pursued once Pakistan shows seriousness in developing the long-pending 683-mile pipeline from Karachi to Lahore with Russian help.
“The government should offer the Russians an attractive equity stake in the proposed pipeline and expedite its construction to realise sufficient gas imports from Russia,” he said.
