Photo courtesy PID
The federal cabinet has approved an agreement to procure liquefied natural gas (LNG) from Azerbaijan at discounted rates, according to a statement issued by the Prime Minister’s Office on Thursday, as P.M. Shehbaz Sharif paid an official visit to the state.
According to the statement, the premier informed Azerbaijan President Ilham Aliyev of the cabinet’s decision during a meeting between the two in Baku. “This is the second major achievement for Pakistan towards fulfilment of energy needs after recently receiving the shipment of crude oil from Russia,” it said, adding that agreement granted Pakistan one LNG cargo on concessional rates per month, with the option to either receive or reject it.
The deal, which comes into effect from next month, has been in the works for the past six months, read the statement. It said Aliyev and Sharif had agreed that Azerbaijan would help Pakistan fulfill its energy needs through cooperation in the fields of oil and gas. The statement further stated that Pakistan State Oil (PSO) and the State Oil Company of the Azerbaijan Republic (SOCAR) would collaborate at the government-to-government level to work out the energy resources. It said both leaders had agreed that Azerbaijan would invest in the alternative energy sector of Pakistan, including solar power generation.
After nearly a year of not availing any LNG spot cargos, Pakistan has issued new tenders for the commodity—for delivery in winter—amidst a global decline in prices from record highs of $70/MMBTU in August to less than $10/MMBTU today.
During a joint press conference after their meeting, P.M. Sharif and President Aliyev also announced that Azerbaijan Airlines had agreed to introduce flights between Islamabad and Baku. The airline would also operate one flight to Karachi every week, they said.
The two leaders also agreed to increase the number of military exercises between their nations, while stressing on exploring additional avenues of cooperation in energy, investment, and education. During his address, Sharif thanked Azerbaijan for its support of Kashmiris’ rights and reiterated Pakistan’s commitment to the territorial integrity of Azerbaijan. He also invited Aliyev to visit Pakistan.