Pakistan LNG allowed to execute framework agreement with Azerbaijan’s SOCAR

The Economic Coordination Committee (ECC) of the Cabinet on Wednesday allowed Pakistan LNG Limited (PLL) to execute a proposed framework agreement with SOCAR Trading, an international marketing and development arm of the State Oil Company of Azerbaijan Republic.

Finance Minister Ishaq Dar chaired the ECC meeting on Wednesday, where the committee considered a summary of the Ministry of Energy (Petroleum Division) regarding the framework agreement between PLL and SOCAR, read a statement released by the Finance Division.

Pakistan seeks spot LNG cargoes for first time in nearly a year

After detailed discussion, ECC allowed PLL to execute the proposed framework agreement with SOCAR Trading.

The ECC also directed the Ministry of Petroleum to determine Pakistan’s need of LNG at least three months in advance on a rolling basis, according to a statement by the Finance Division.

Eariler this week, Pakistan issued two tenders seeking spot LNG cargoes for the first time in nearly a year, while also announcing a deal that will see Azerbaijan provide the country with one LNG cargo per month.

Dependent on gas for power generation and running short of foreign exchange to pay for imports, the country has struggled to procure spot cargoes of LNG after global prices spiked last year following Russia’s invasion of Ukraine, leaving it to face widespread power outages.

But Asian spot LNG prices this year have eased from record highs of $70/mmBtu hit in August, and are now trading below $10.

Pakistan LNG, a government subsidiary that procures LNG from the international market, has one tender seeking six cargoes on a delivered-ex-ship (DES) basis to Port Qasim in Karachi in October and December, according to the tenders posted online.

Separately on Tuesday, Pakistan’s petroleum minister Musadik Malik told a news conference that Azerbaijan will supply an LNG cargo every month to Pakistan at a “cheaper price.”

“Under the contract, the Central Asian country would provide Pakistan a distressed LNG cargo on a monthly basis. The LNG price would be much lower than in the international market,” he said.

“Under the terms of the contract, it would be Pakistan’s choice to accept the cargo or not. However, Azerbaijan would be obligated to provide distress cargo on a monthly basis,” he added.

ECC meeting

Meanwhile, the Finance Division on Wednesday also shared that the ECC approved a technical supplementary grant of Rs404.769 million in favour of Cabinet Division for various requirements of six aviation squadrons.

The ECC also discussed and approved Rs734 million additional funds in favour of the Ministry of Industries and Production for the payment of Employees’ salaries of Heavy Electrical Complex (HEC), markup to Bank of Khyber, and operating/ running expenses, subject to reconciliation of figures from Finance Division.

It further directed the Privatization Commission to complete the privatisation process of HEC by 30th June.