Cabinet Approves LNG Procurement Agreement with Azerbaijan
LNG from Azerbaijan: The federal cabinet of Pakistan has given its approval for an agreement to acquire liquefied natural gas (LNG) shipments from Azerbaijan at discounted rates. The statement released by the Prime Minister’s Office on Thursday confirmed the decision, highlighting that Prime Minister Shehbaz Sharif informed President Ilham Aliyev of Azerbaijan about the cabinet’s approval during their meeting in Baku, the capital of Azerbaijan.
Significant Achievement for Pakistan’s Energy Needs
The official communique stated that this agreement marks another significant achievement for Pakistan in meeting its energy requirements. The country recently received a shipment of crude oil from Russia, and now with the approval of LNG procurement from Azerbaijan, Pakistan is moving forward in addressing its energy demands.
Concessional Rates for Monthly LNG Cargo
According to the agreement, Pakistan will receive one LNG cargo per month at concessional rates starting from the next month. Prime Minister Shehbaz has been actively working on finalizing this deal with Azerbaijan for the past six months, as confirmed by the PM Office.
Cooperation in Oil, Gas, and Alternative Energy Sectors
During their meeting, both leaders expressed mutual interest in strengthening cooperation between Azerbaijan and Pakistan in the fields of oil and gas. The Pakistan State Oil (PSO) and the State Oil Company of the Azerbaijan Republic (SOCAR) will collaborate at the government-to-government level to explore and utilize energy resources effectively. Additionally, Azerbaijan has agreed to invest in Pakistan’s alternative energy sector, including solar power generation.
Spot LNG Tenders Issued
In another development, Pakistan recently issued two tenders for spot LNG cargoes, marking the first time in almost a year. Due to its reliance on gas for power generation and limited foreign exchange reserves, Pakistan has faced challenges in procuring spot LNG cargoes, especially after the surge in global prices following the Russian-Ukrainian conflict. However, Asian spot LNG prices have significantly decreased this year, making it a favorable time for procurement.
Published in PakWeb, June 16th, 2023.
Stay informed and engaged with the PakWeb by following us on Facebook, Twitter, and participating in our Discussion Forums.
