Pakistan sends oil import deal draft to UAE

ISLAMABAD: Pakistan has sent the draft of Inter-Governmental Agreement (IGA) to the UAE for an official nod from authorities concerned in Abu Dhabi. Once it is approved, negotiation for a commercial agreement for the import of Mogas under GtG mode will start between officials of Pakistan State Oil (PSO) and Abu Dhabi National Oil Company (ADNOC).

One of the top officials at the Energy Ministry confirmed the development to The News. “We have sent the IGA draft to the UAE for approval. Once it is signed, commercial talks would begin between the state entities of both the countries.”

The government wants to import from the UAE under GtG mode 1.5 million tonnes of Motor Spirit per annum, which means 30 cargoes in one year under the expected 5-8 year deal.

This means the country would import two and a half to three cargoes a month from the UAE. During the Abu Dhabi talks held in the first week of November 2022, top officials from both sides had agreed to enter into a GtG deal for the import of Mogas and jet fuel.

“This would help Pakistan have sustainable availability of petroleum products in the country. More importantly, the GtG deal would also provide a monetary solace in terms of premiums in importing petrol and other products,” said the official adding they were hoping that the commercial agreement between PSO and ADNOC would be finalised soon after the IGA was inked. Pakistan wants to ensure the import of petrol from January 15, 2023 under GtG mode.

The official explained that after the IGA was inked, both sides would initiate talks on the structure of commercial agreement and finalise the specifications of petrol, and jet fuel. PSO gets diesel from KPC (Kuwait Petroleum Company) under the GtG deal and purchases petrol from the open market with high premiums depending upon the prices of products in the international market.

Now under the GtG deal, PSO would get petrol from ADNOC at a negotiated price. In addition, PSO would also import jet fuel on a need basis as the country’s refineries cater to jet fuel needs most of the time.