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Tuesday March 05, 2024

LNG deal: Azerbaijan assured of confidentiality in future

The government has given an assurance to Azerbaijan that confidentiality will never be breached in future on LNG business with its state-owned company SOCAR

November 30, 2023
A file photo of Pakistan and Azerbaijan flags. — Anadolu Agency
A file photo of Pakistan and Azerbaijan flags. — Anadolu Agency

ISLAMABAD: In an effort to protect the government-to-government (GtG) agreement for LNG supply with Azerbaijan, the government has given an assurance to Azerbaijan that confidentiality will never be breached in future on LNG business with its state-owned company SOCAR.

To this effect, authorities are in the process of developing new Standard Operating Procedures (SOPs) to ensure that the monthly price offers made by SOCAR will be kept confidential and not used for price discovery with LNG bidders in the open global market. This assurance was provided by the secretary of the Petroleum Division to Azerbaijan’s ambassador during a meeting held on November 28, 2023 (Tuesday).

In the meeting, the Azeri ambassador expressed dissatisfaction over the breach of confidentiality clause of GtG LNG supply agreement, as reported by a senior official of the energy ministry to The News.

Caretaker Prime Minister Anwaar-ul-Haq Kakar has already taken a serious notice of the breach of confidentiality by Pakistan LNG Limited (PLL), as reported in The News story published on November 26, 2023, and directed the petroleum secretary to investigate the breach with SOCAR, an Azeri state-owned company and submit report. An official said: “We have explained the whole episode to the ambassador, stating it was a collective decision of the PLL management and its board to obtain the price offer from SOCAR for LNG cargo for the month of January in the GtG deal, which was at $17.96 per MMBtu. This was intended to be used as a tool to further lower the lowest bid price of OQ Trading Company, which was at $18.46. The difference was $1.6 million, but the board instructed OQ Trading not only to match the price offered by SOCAR but also to come up with a new price, lowering it by one cent compared to the $17.96 per MMBtu offered by SOCAR. In return, OQ Trading did the same and managed to win the contract.” The official added: “With assurance that such practices would never be repeated in the future, the ambassador was pacified.”