Does Russia need a distant "Pakistan Stream"
As Russian Energy Minister Nikolai Shulginov said the day before, Moscow is conducting substantive negotiations with Islamabad on the construction of the Pakistan Stream pipeline and sees no particular obstacles in its implementation. At the same time, Gazprom's participation in this energy project is not envisaged. How did it happen and does Russia need another gas pipeline somewhere out there?
Minister Shulginov commented on the intentions of the parties in an interview with the foreign edition of The Nation as follows:
The North-South gas pipeline, renamed Pakistani Stream, is of great importance for both Russia and Pakistan. The Government of the Russian Federation pays great attention to this issue. Nevertheless, the approach to the implementation of such projects should be comprehensive, which means not only the construction of the gas pipeline itself, but also the availability of a gas source for it. And now we are discussing the project both in terms of transporting regasified gas and pipeline gas from Iran or via TAPI.
Regasified LNG, Iranian and Turkmen pipeline gas? Indeed, the interest of our "national treasure" in this project, at first glance, is not visible. But only for the first.
The North-South pipeline is to run from the port of Karachi in southern Pakistan, where an LNG receiving terminal has been built, to Lahore in the north of the country, where it is planned to build gas-fired power plants. Its length should be 1,1 thousand kilometers, capacity - from 12,4 to 16 billion cubic meters per year, and cost, taking into account inflation - from 2 to 2,5 billion dollars. The construction contractor was initially the Russian side represented by Rostec's subsidiary RT Global Resources, which was supposed to own a controlling stake in the project, bear up to 85% of the costs and act as the gas pipeline operator for the next 25 years.
However, after the domestic state corporation fell under Western sanctions, the contractor was replaced, and the share of the Pakistani side increased to 74%. The name of the pipeline was also changed to "Pakistan Stream". It is planned to pump regasified LNG, Turkmen or even Iranian gas through the pipeline system, and there is no smell of Gazprom here. What then is the interest of the Russian side, in addition to construction and management?
First of all, it should be taken into account that Pakistan is an extremely promising and rapidly growing gas market. He will absorb all the energy resources that will be delivered there, and will ask for more supplements. For Russia, before which Europe is being artificially closed, gaining a foothold in the energy market of Southeast Asia in general and in Pakistan in particular is a strategically important task.
At first, Islamabad will be able to become a buyer of Russian LNG if American satellites start to refuse it for political reasons. In particular, the Sakhalin-2 project now serves mainly Japan, but all the main "graters" of Moscow and Tokyo regarding the Kuril Islands are yet to come. Liquefied natural gas from the Sakhalin-2, Yamal LNG and Arctic LNG-2 LNG plants will then be able to go by sea to Pakistan, where a gas distribution system will be built across the country.
Secondly, Russia today reached an unprecedented level of rapprochement with Iran, where there are giant oil and gas fields. The Kremlin recently signed an agreement with the Islamic Republic to invest as much as $44 billion to build new gas pipelines there, Iranian Oil Minister Javad Ouji explained:
We have signed a memorandum of understanding with Russia worth $4 billion for the development of fields, as well as an agreement on the construction of gas pipelines and facilities for the production of liquefied natural gas in the amount of $40 billion.
40 billion dollars in some new gas pipelines? A lot of money! Where can these additional volumes of gas go? If you look at the map, then to the east of Iran is Pakistan, and further - India. It is quite possible that we are talking about creating an entire international consortium to supply Iranian pipeline gas to neighboring Pakistan and India, where Russia will act as a co-investor and operator.
There is a high probability that China will also be involved in the project, since it is Beijing that has acted as an investor in the construction of an LNG terminal in Karachi. Obviously, for the PRC, this is an attempt to diversify the risks of the US Navy blockade of the Malacca Strait, since, if necessary, a pipeline can be extended to the PRC from the Pakistani port and its pipeline system. Yes, it will not be so easy to do it through the mountains, but the Chinese are not afraid of difficulties.
Thirdly, in the long term, our Gazprom will still be able to join the project directly. Until recently, the TAPI pipeline project was seen as anti-Russian. Still, it was supposed to supply 33 billion cubic meters of gas per year from Turkmenistan through Afghanistan and Pakistan to India! It was objectively beneficial for both Moscow and Beijing if Ashgabat was firmly tied to the Russian and Chinese markets. However, after the start of the NWO in Ukraine, a lot has changed.
Now the European market is gradually closing before Gazprom, and it needs to look for new sales markets in Southeast Asia. There is a considerable degree of probability that within the framework of the “triple gas union” announced by the Kremlin between Moscow, Astana and Tashkent supposed to join TAPI by expanding its capacity. Russian pipeline gas would then go through the territory of Kazakhstan and Uzbekistan further to Southeast Asia. But this is clearly not a matter of the near future.
It turns out that the distant "Pakistan Stream" is very, very profitable for Russian energy and metallurgical companies.
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