Pakistan has green-lighted a deal to purchase liquefied natural gas (LNG) cargoes from Azerbaijan on concessional rate, the PM House said in a statement on Thursday.
Prime Minister Shehbaz Sharif, during his official to visit Azerbaijan, informed Azeri President Ilham Aliyev about the approval given by the federal cabinet to the LNG deal in a meeting at the Azeri capital Baku, the statement added.
“This is the second major achievement for Pakistan towards fulfillment of energy needs after recently receiving the shipment of crude oil from Russia,” the communique read.
Under the agreement, Pakistan will receive one LNG cargo on concessional rates starting next month.
PM Shehbaz has been working on the deal with Azerbaijan for last six months, the PM Office said.
The two leaders agreed that Azerbaijan would help Pakistan fulfill its energy needs through cooperation in the fields of oil and gas.
Pakistan State Oil (PSO) and State Oil Company of the Azerbaijan Republic (SOCAR) will collaborate at government-to-government level to workout the energy resources, according to the PM Office.
It was agreed that Azerbaijan would invest in the alternative energy sector of Pakistan including the solar power generation.
Pakistan has issued two tenders seeking spot liquefied natural gas (LNG) cargoes for the first time in nearly a year on Tuesday, while also announcing a deal that will see Azerbaijan provide the country with one LNG cargo per month.
Dependent on gas for power generation and running short of foreign exchange to pay for imports, the country has struggled to procure spot cargoes of LNG after global prices spiked last year following Russia's invasion of Ukraine, leaving it to face widespread power outages.
But Asian spot LNG prices this year have eased from record highs of $70/mmBtu hit in August, and are now trading below $10.
Earlier this week, Pakistan LNG, a government subsidiary that procures LNG from the international market, issued tender seeking six cargoes on a delivered-ex-ship (DES) basis to Port Qasim in Karachi in October and December, according to the tenders posted online.
The delivery windows are Oct 5-6, 20-21 and 31, and Dec 7-8, 13-14 and 24-25. The tender will close on June 20.
Pakistan LNG's second tender seeks three cargoes, also on DES basis to Port Qasim, for delivery windows of January 3-4, 28-29 and February 23-24. The second tender closes on July 14.
Pakistan LNG last issued a tender seeking 10 spot cargoes in July 2022, but it received no offers.
Pakistan has two long-term supply deals with Qatar, one signed in 2016 for 3.75 million metric tons of LNG a year, and another signed in 2021 for 3 million metric tons a year.
It also has an annual portfolio contract with ENI for 0.75 million metric tons a year.
In 2022, Pakistan's imports of LNG slowed to 6.93 million metric tons for the year, down from 8.23 million metric tons in 2021, according to data from data analytics group Kpler.
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