$2 billion natural-gas pipeline also in the works as political tensions with U.S. mount
By SAEED SHAH in Islamabad, Pakistan, and JAMES MARSON in Moscow
Russia has agreed to sell military helicopters to Pakistan and is poised to build a $2 billion natural-gas pipeline in the South Asian country—its biggest investment there in decades—as Islamabad turns toward a former adversary and away from the U.S., its longtime ally.
Islamabad has been weighing its strategic options amid rising tension with Washington, which views Pakistan as an unreliable ally in combating Islamist militants in the region, including neighboring Afghanistan.
On Thursday, Pakistan said it would buy four Russian Mi-35 attack helicopters for an undisclosed price, after a spate of high-level visits between the two countries.
In the Russian city of Ufa last month, Pakistani Prime Minister Nawaz Sharif met Russian President Vladimir Putin and declared that he wanted a “multidimensional relationship” encompassing defense, commerce and energy.
That represents a major shift for both countries, in response to a changing geopolitical dynamic. Pakistan worked alongside the U.S. to defeat Soviet forces that occupied Afghanistan in the 1980s, while Russia built close ties with India, Pakistan’s estranged neighbor and rival.
Now, the U.S. is increasingly embracing India as a counterweight to a rising China, which it views as a strategic competitor. That has encouraged erstwhile enemies Russia and Pakistan to mend fences.
“Pakistan has decided it is no longer an American client state,” said Zafar Hilaly, a former senior Pakistani diplomat. “Pakistan has decided that although America will remain important, it must have other alternatives.”
The biggest marker of this new relationship is a proposed 1,100-kilometer (684-mile) pipeline, to be built by Russian state-owned industrial conglomerate Rostec. The two countries are expected to sign an agreement to move ahead within the next month, officials from both sides said.
The pipeline would carry imported natural gas from the port city of Karachi to Lahore in the east, helping the country deal with crippling energy shortages. Rostec, run by a close friend of Mr. Putin’s, would finance, own and operate the pipeline for 25 years.
“It’s very important for Russia from a geopolitical point of view. Russia is trying to enter this market and compete with China and the U.S.,” said Vladimir Sotnikov, senior research associate at the Russian Academy of Sciences’ Institute for Eastern Studies.
Despite Islamabad’s outreach to Russia, experts said it is likely to seek continued close ties to the U.S., which is Pakistan’s biggest supplier of military aid and equipment. Since 2002, the U.S. has provided Pakistan with $31 billion in civilian and military aid and reimbursements, according to the Congressional Research Service.
Pakistan recently signed a nearly $1 billion deal to purchase 15 American AH-1Z Viper helicopters, as well as 1,000 Hellfire missiles and other equipment.
Both Russia and China are concerned about protecting their southern underbellies against the export of extremism and instability from Pakistan and Afghanistan, by investing there to promote economic development.
Islamabad has taken action against Pakistani-based Islamist militants from China’s northwestern Xinjiang region over the past year. Analysts also say Beijing’s influence helped prod Pakistan into promoting peace talks between the Taliban and the Afghan government.
Earlier this year, China and Pakistan, long close allies, announced plans for a massive, Chinese-funded infrastructure-building program. China has also pledged to fund the construction of a gas pipeline to connect Iran and Pakistan.
The Russian pipeline would represent Moscow’s first major project in Pakistan since the early 1970s, when the Soviet Union helped build a steel mill in Karachi during a brief warming of relations that followed the election of a left-leaning leader in Islamabad. The two countries are now discussing ways that Russia can upgrade the mill, Pakistani officials said.
Mobin Saulat, managing director of Inter State Gas Systems, a Pakistani government corporation that oversees gas import projects, said the new pipeline should be completed by 2018. It would be able to carry 2 billion cubic feet of gas a day, equivalent to about half of Pakistan’s current gas production from its domestic fields.
Rostec said it would raise the funds needed for the project. The U.S. imposed financial sanctions on Rostec after Russia’s interventions in Ukraine, effectively cutting it off from U.S.-dollar financing.
Courtesy: THE WALL STREET JOURNAL
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