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Pakistan-Russia Sign 1.7 Billion Dollar Energy Deal
Dec 26, 2014

For the first time, Pakistan and Russia have signed an energy deal worth 1.7 billion dollar to lay a gas pipeline from Karachi to Lahore, a move that may lead to further improvement in their ties.

The supply of a Liquefied Natural Gas (LNG) is expected to start before March next year, according to a recently published news report. The pipeline would be used to transport imported LNG from Karachi to Punjab province. This energy agreement was signed during the visit of Sergei Shoigu last month, the first visit by a Russian Defence Minister to Pakistan in 45 years. The last visit to Pakistan was made by Soviet Union's Defence Minister Andrey Grechko.

It is the first time Pakistan and Russia have signed an energy pact decades after the recent deal to increase military cooperation. Pakistan, over the past few years, has carefully courted Russia to boost bilateral relations. Its former army chief Gen. Ashfaq Parvez Kayani visited Russia in 2009 and 2012.

Russia has helped Pakistan set up the Karachi Steel Mills and also supported the Oil and Gas Development Company Limited, which is still using old Russian machinery in exploring oil and gas.

Pakistan is currently working on two LNG pipelines as an alternative to the apparently doomed Iran-Pakistan (IP) gas pipeline project, which included LNG Gwadar pipeline and south pipeline from Karachi to Lahore. The Pakistan government has signed a deal with China to award 3 billion dollar Gwader LNG pipeline and terminal project.

During this visit both countries also inked a defence and military cooperation deal. Earlier this year, Russia lifted arms sales embargo to Pakistan, and a final go ahead was given for the purchase of Russian
MI-35 helicopter gunships.

 


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