Russia and Pakistan Agree to US$10 Billion Gas Pipeline Deal, Potential for EAEU FTA
In a significant deal, Russia and Pakistan are set to to sign a US$10 billion offshore gas pipeline deal, a project planned by the latter to capture the energy market of Pakistan. Russia has nominated Gazprom for implementation of the project.
Pakistan’s cabinet has also permitted the company to conduct the feasibility study at its own cost and risk. These projects are called a game changer for Pakistan as they will not only lead to regional connectivity, but will also meet growing energy needs of the country.
Amid a long-running tussle with Europe and the United States over the annexation of the Ukrainian region of Crimea, Russia is looking for alternative markets and wants to capitalize on the growing energy demand in South Asia. The two countries are both members of the Shanghai Co-Operation Organisation, a regional bloc that also includes China and India and is gaining considerable traction as a trade and infrastructure facilitator throughout Eurasia.
Pakistan will also soon make a formal request to the Eurasian Economic Commission to start negotiations on a free trade agreement with the 4-nation bloc that includes Russian Federation.
The EEC is a permanent regulatory body of the Eurasian Economic Union (EAEU) that also has Armenia, Belarus, and Kazakhstan as its members. EEC holds the status of a supranational regulatory body and its decisions are binding on the territory of the EAEU member states. The EAEU member countries have a combined population of over 1.8 billion.
Pakistan is exploring Russian markets to boost exports of food products to take advantage of the vacuum created after Moscow banned food imports from European countries in retaliation for sanctions imposed over its actions in Ukraine.
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