Pakistan’s energy crisis is expected to cool off soon following another effort by the South Asian nation to import additional gas from Azerbaijan.
Minister of State for Petroleum Musadik Malik told a local news channel in Islamabad that the government will import 20,000 tons of gas from Baku in the next few months.
Musadik Malik also said the Russian petroleum minister would visit Pakistan in January 2023 to negotiate a crude import deal. He said the government is working on the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project to import 1,300 billion mass flow (MF) of gas from Azerbaijan per year to address the country’s gas shortage.
The state minister was hopeful that Russia would give a discount on its crude exports to Pakistan amid a spiraling circular debt and financing issues faced by the nation. Meanwhile, sources close to the minister said the coalition may allow Pakistan LNG Limited (PLL) to pair up with the State Oil Company of Azerbaijan Republic (SOCAR) for procurement of one LNG cargo on a monthly basis.
Pertinently, an Inter-Government Agreement (IGA) was signed on February 28, 2017, between the Governments of Pakistan and Azerbaijan for energy cooperation, and PLL and SOCAR, SOCAR Trading, and its subsidiaries were nominated to negotiate necessary contractual details on the LNG project at the time.
PLL has not received any bids for earlier tenders and, like many other local players, it is dealing with letters of credit (LC) issues and cargo finalization hiccups.’
PLL may execute a deal with SOCAR under the given circumstances because there are no financial obligations or any payment commitments. However, LNG may be purchased under the above-mentioned IGA only if an attractive price is offered or if expensive LNG is desperately needed as a last resort.
