Pakistani Prime Minister Muhammad Shehbaz Sharif met with President of Azerbaijan Ilham Aliyev earlier today (June 15) in the capital city of Baku, and signed an agreement to import Liquefied Natural Gas (LNG) from Azerbaijan.
PM Shehbaz Sharif arrived in Baku on 14 June on a two-day official visit to Azerbaijan. First Deputy Prime Minister of Azerbaijan, Yagub Eyyubov, Pakistan Ambassador to Baku Bilal Hayee, and other high-ranking Azerbaijani officials received the Pakistani premier at the airport.
The meeting allowed the stat-owned Pakistan LNG Ltd (PLL) to execute the proposed framework agreement with the State Oil Company of Azerbaijan Republic (Socar) Trading on a government-to-government basis.
Meanwhile, the Economic Coordination Committee (ECC) of the Pakistani government directed the Ministry of Petroleum to determine Pakistan’s needs for LNG at least three months in advance on a rolling basis.
Under this agreement, the Azerbaijani side will offer one LNG cargo per month – 45 days before the start of the delivery window, each offer will have a set validity period during which PLL would accept or not the offer.
The transaction will be dealt in USD, and initially, the agreement would be valid for one year and extendable for more year.
A mechanism has been formulated to adjust the price in comparison with the prevailing international prices of LNG as well as ensure the affordability of downstream customers in the power sector.
Following the economic and energy crisis that hit the country the worst, the Pakistani government has taken extra measures to ensure energy security by building win-win business partnerships with Central Asian Republics, Azerbaijan and Russia.
It is worth mentioning that Pakistan has already started importing LNG from Turkmenistan through Afghanistan and Russian Crude oil.
