Minister of Energy of the Russian Federation says negotiations underway for finalising an agreement n Over the past 6 years, trade turnover between Russia, Pakistan has almost doubled.

A high level delegation of the Russian Federation, headed by Nikolay Shulginov, the Minister of Energy, will hold talks with Pakistani officials in Islamabad to explore cooperation avenues in the fields of oil, gas and trade this week . Mr. Shulginov gave an exclusive interview to The Nation.

1. Pakistan has recently shown an interest in purchasing lNG from Russia, how early the deal could be finalised?

It is a matter of commercial negotiations – once the parties reach agreements. I shall only note that most of Russian LNG volume is sold via long-term contracts. However, there are spot volumes, their supply can be negotiated, too. We are aiming at increasing our total annual production of LNG up to 100 million tons by 2030. In our opinion, this is the additional volume which can be discussed. Especially if we take into account the increasing demand for gas in Pakistan.

2. North-South gas pipeline project in doldrums from last many years? What is hampering the project and when do you expect it would be started?

The North-South gas pipeline, which was renamed the Pakistan Stream, is significant for both Russia and Pakistan. The Government of the Russian Federation pays great attention to it. Nevertheless, the approach to the implementation of such projects has to be comprehensive, it means not only a pipeline but also a source of gas for it. And we are currently discussing the project both from the point of view of transporting regasified gas and pipeline gas – from Iran or coming through TAPI. It is crucial to carefully study all the options available and come to the most transparent and economically justified one. I believe we will work out a road map on this project in the nearest future. The relevant documents were finalized by the working groups of the two countries last February. This issue will certainly be raised at a meeting of the intergovernmental commission.

3. In the backdrop of hurdles in the execution of North South gas Pipeline, how the new deal for Oil purchase would work between Russia and Pakistan?

I don’t see any obstacles. As I have already said, there is a search for comprehensive solutions for the project. Moreover, the gas issue doesn’t relate to oil supply. The negotiation process on oil supplies has not been completed, so it is premature to talk about any agreements, even preliminary ones.

4. What are the prospects of Pakistan buying Russian oil on discounted price?

The issue of purchasing oil is a market-based and commercial one. As a matter of fact, so is the level of discounts. In order to be able to fully establish trade of Russian oil, it is necessary to resolve a number of logistical and financial issues. Our specialists are currently working on this so that everything would be mutually beneficial.

5. Pakistan is seeking oil purchase from Russia on same rates as it was provided to India? Will Russia accept Pakistan’s demand?

We work in the market, therefore, after solving technical issues, we see no problems for Pakistani companies to purchase oil on the same terms as other partners.

6. Pakistan’s Refineries also raised concern about payment mechanisms, given global sanctions and restrictions on Russia. China and India have the capacity to export products to Russia and secure oil through barter and also have currency swap arrangements with Moscow and certain levels of Ruble reserves. Pakistan has neither. What would be the payment mechanism for Russian oil? Russian currency or US dollars?

We are giving preferences to settlements in national currencies or in currencies of third countries protected from sanctions risks. I am sure that with the development of our bilateral trade, solutions to this issue will also be found.

7. Does Russia still see Pakistan Steel Mills in Karachi as its “own project” and would be interested in its revival, if asked so?

Russia has the necessary technologies to modernize this enterprise. In 2013, an appropriate intergovernmental memorandum was signed, and later the Russian side presented a concept for modernizing and increasing the production capacity of the plant. As it is known, the Government of Pakistan decided to privatize this enterprise, but these plans have not been implemented so far. But I suppose that Russian companies remain interested in this project and are ready to consider options for participating in it.

8. Has Russia ever thought of parenting a huge project like Pakistan Steel Mills in Pakistan?

I consider this question as premature. I would like to draw your attention to the fact that there is no mechanism for protecting Russian investors in Pakistan. To date, there is no agreement between the governments of our countries on the encouragement and mutual protection of investments.

9. What about the prospects of Pakistani exports to Russia?

In addition to the discussed export supplies of gas, LNG and oil, there are prospects to increase the volume of imports of Pakistani goods to Russia. For instance, these can be products of light industry, agriculture of your country, goods from metallurgists. In general, the trend is not bad: over the past 6 years, the trade turnover of our countries has almost doubled. I am sure that there are still groundwork for our economies to use the opportunities both countries have.