ISLAMABAD: A senior official of the Energy Ministry told our correspondent at Storyline, that Pakistan has resumed talks with Azerbaijan regarding the latter’s offer made in late 2016 to provide Mogas on credit in addition to the ongoing negotiations for distressed LNG at affordable pricing.
As Pakistan battles the distressing energy crunch and externally influenced fuel prices it has resumed talks with Azerbaijan to import petrol on credit.
Mogas will be imported by Pakistan from the State Oil Company of the Azerbaijan Republic (SOCAR).
As long as the deal is done on a government-to-government basis (G2G) it will ensure the country’s long-term supply of Mogas. Authorities seek 1-2 Mogas cargoes per month from SOCAR.
As for LNG SOCAR has little to no advanced inventory due to over-commitments to European buyers. Islamabad is negotiating with Baku to import 20,000 tons of gas which they hope will be finalized soon.
In 2017 both countries signed an Intergovernmental Agreement (IGA) under which Azerbaijan’s state-owned SOCAR provided oil and gas products such as furnace oil, gasoline and diesel and liquefied natural gas. Previously SOCAR offered LNG credit lines of $120 million and petroleum credit lines of $100 million each for a period of 60 days.
The agreement was reportedly signed under UK law at the time, but Singapore law was urged. As a result, the deal was delayed.
The Ministry of Petroleum clarified last year that it was unable to take advantage of SOCAR’s offer of multi-million-dollar credit lines for oil and gas supplies to Pakistan due to “substantially higher prices.”
From February to August 2021 SOCAR offered a $120 million LNG credit line during which LNG vessels were available for $7.2 million per cargo or $51 million for seven cargoes in spot tenders. Similarly, SOCAR’s offer was higher by $15 million per cargo or $105 million for seven consignments compared to Qatar’s LNG agreement.
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