Russia Concerned Over Pakistan Considering Other Options for Their Joint Gas Pipeline Project

Wednesday, July 14, 2021

Uriel Araujo, researcher with a focus on international and ethnic conflicts.

Moscow is concerned over reports that the Pakistani authorities in Islamabad are considering alternative plans to build the Pakistan-Stream Gas Pipeline (PSGP) project, formerly known as the North-South Gas Pipeline. Islamabad is considering, according to these reports, to have Pakistani companies (Sui Northern Gas Pipelines Limited – SNGPL, and Sui Southern Gas Company Limited – SSGCL) carrying out the project at a lower cost of $1,6 billion – rather than having a Russian company (ETK) carrying it out at a $2,5 billions estimated cost. This is happening at a time when some experts argue that growing Ukrainian-Pakistani defense cooperation could also harm Russian-Pakistani bilateral relations.

In 2015, Moscow and Islamabad signed an agreement for the North-South gas pipeline construction, from Lahore (northern Pakistan) to Karachi (south). Such was not implemented due to US sanctions on Russian firm Rostec. There were also some disagreements over fees. However, both countries agreed on amendments to their deal on May 28. The next step is to sign the agreement (this was scheduled to take place on July 27) and then sign the share-holders Agreement (SHA) within 60 days. Negotiations over the issue started on Monday, between a high level Russian delegation and Pakistani authorities. The delay in the construction itself has already placed an additional burden on total costs.

This is a project that has been under negotiation for quite some time, with some setbacks. Nonetheless, it is too soon to consider it aborted. All indications are that it will proceed. Should it not work out, such could cause some harm to bilateral relations, however Russia and Pakistan do have other geopolitical and geoeconomic convergences. For example, Moscow today finances the Central Asia-South Asia (CASA-1000) megaproject (under construction) which will allow the export of surplus hydroelectricity from Tajikistan and Kyrgyzstan to both Afghanistan and Pakistan. It is expected to be concluded by 2023.

The Ukrainian issue can cause some tensions, however. General Qamar Javed Bajwa, the Pakistanin chief of Army Staff, visited Ukraine in May. While at a military test site (in Kharkiv), he stated that Islamabad seeks to enhance defense cooperation with Kiev, by joint ventures and technology transfer. He also met with top officials (Prime Minister, and Minister for Strategic Industries of Ukraine).

Interestingly, Pakistan is also seeking deep ties with Turkey. Last week, Pakistan President Arif Alvi conferred the Nishan-e-Imtiaz military medal on Turkish commander Gen Umit Dundar. In seeking this, Pakistan is following the steps of both Ukraine and Poland - at a time when Russian-Turkish relations are at low ebb.

Islamabad eyes the Bayraktar TB-2 drones – which helped Azerbaijan fight Armenia in the November 2020 Nagorno-Karabakh conflict. Although Russia remained neutral during the conflict, Russian-Armenian ties certainly trouble Ankara’s regional aspirations – which have been described by some as “neo-Ottomanist”.

Even so, the Blue Stream and Turkstream, for example, are major gas pipelines that have created deep energy dependences between Moscow and Ankara. The truth is that Turkey allows Russian gas to reach Southeastern Europe. These are stable ties that managed to remain even after the incident when Turkish military downed (in 2015) a Russian fighter jet, and after the crisis that ensued.

As for Pakistan, even though it indeed played a key role in supporting the West during the Cold War, it has been cultivating very solid ties with Russia for a while now. Both countries have a Joint Military Comissions since 2018, and both have an interest in fighting terrorism. This is so because Islamic State (Daesh) militants have a growing foothold in Pakistan’s neighbour Afghanistan and some of its fighters have relocated from Syria and Iraq to that region. Also in 2018, Moscow and Islamabad signed a rare military cooperation pact, which includes a training agreement. Thus, Moscow filled a void left by Donald Trump, who halted military programs with Pakistan. Since then, US-Pakistani relations have been deteriorating.

Furthermore, during the Russian Foreign Minister Sergey Lavrov two-day visit to Pakistan, in April, “enhanced defense and security cooperation” between the two countries was discussed, and Moscow agreed to provide Islamabad with some unspecified military equipment. Both countries have interests in the Afghan peace process after the recent American troops withdrawal. Last month, Lavrov and his Pakistani counterpart Shah Mahmood Qureshi agreed to work together for negotiating a political solution for the Afghan crisis

It is true that from an American perspective, NATO is basically a tool to counter both Russia and China, as Wess Mitchell (co-chair of the NATO 2030 Reflection Group) stated in June while briefing the US House Foreign Affairs subcommittee on Europe. It is also true that Pakistan, while not a NATO member, has been, since at least 2004, a major non-NATO ally. However, one should keep in mind that Turkey, a full fledge NATO member, has been managing to test the boundaries of the NATO alliance for a while. Pakistan might test it too, as it happens to be a key player in China’s Belt and Road Initiative. Pakistan provides an important market to Russian defense industry, and this shows that, however solid Indian-Russian relations are, Moscow has also other options in South Asia and is quite capable of engaging with both New Delhi and Islamabad.

Source: InfoBrics