Pakistan-Azerbaijan LNG Deal: All Systems Go for a Game-Changing Agreement
Pakistan Set to Finalize LNG Deal with Azerbaijan for Cost-Effective Gas
KARACHI: State Minister for Petroleum Dr Musadik Malik announced on Saturday that the government is on the verge of finalizing an accord with Azerbaijan to purchase cost-effective liquefied natural gas (LNG) within the next few days, according to The News.
During a media interaction in Karachi, the minister provided insights into the agreement, emphasizing its benefits for Pakistan. He explained that the deal enables the government to buy LNG when necessary, but it also gives them the “right of refusal” if not required.
Furthermore, Malik highlighted that the purchase of LNG would be contingent on its affordability compared to other energy sources. The availability of sufficient foreign exchange reserves would also influence the decision to buy.
The minister clarified that the gas purchase would be considered if it proves cheaper based on a thirty-day average of two international LNG standards.
Additionally, Dr Malik extended the opportunity to the private industry to procure cheap LNG, making it accessible to both large and small industries. However, he firmly stated that the resale of this cheap LNG would not be permitted.
Addressing the demand of petroleum dealers to increase the margins on petroleum products, Dr Malik stated that the margins would be tied to the wages of employees and their working hours at the petrol pumps. A final report on the dealers’ margins will be released on Monday, and dealers must comply with all conditions to receive an increase in their margins.
The Petroleum Division has commenced the data collection process for petrol pumps across the country, and this exercise is expected to be completed by Monday, the state minister added.
The offer for LNG shipments earlier this month marked a significant achievement for energy crisis-hit Pakistan after unlocking the International Monetary Fund (IMF) loan.
Pakistan has two long-term supply deals with Qatar for LNG and an annual portfolio contract with ENI for gas. In 2022, Pakistan’s imports of LNG slowed compared to the previous year.
The potential LNG deal with Azerbaijan is expected to provide a cost-effective solution to Pakistan’s energy needs and help alleviate the ongoing energy crisis in the country.
