SOCAR may supply LNG to Pakistan every month

The State Oil Company of Azerbaijan (SOCAR) may supply one cargo of liquefied natural gas (LNG) to Pakistan every month, Report informs via the Business Recorder.

The Economic Coordination Committee (ECC) of the Cabinet is all set to approve the pact between Pakistan LNG Limited (PLL) and Azerbaijani company, M/s SOCAR/ SOCAR Trading, for import of one LNG cargo monthly.

Pakistan State Oil (PSO) and Pakistan LNG Limited (PLL) are importing Liquefied Natural Gas (LNG) under long-term LNG supply contracts to minimize gap in demand and supply of gas under three pacts.

The first long-term agreement had been signed by PSO with Qatar Gas in 2015 at 13.37 percent of price (slope of Brent) for five cargoes monthly for 15 years.

The second PSO-Qatar Gas agreement was inked in 2021 at 10.2 per cent of price (slope of Brent), for ten years, according to which Qatar Gas is to supply three cargoes monthly from July 22 to December 23 and four cargoes monthly from Jan 2024 to December 2032.

PLL-Eni signed an agreement in 2017 at 12.05 percent of price (slope of Brent) according to which Eni is to supply one cargo per month for 15 years. In addition, PLL has been importing up to 3 LNG cargoes/ month through spot tendering conducted from time to time to meet seasonal peak demand.

Meanwhile, PLL has also been exploring availability of LNG volume through Government to Government (G2G) agreements with different countries. In this regard an Inter-Government Agreement (IGA) was signed between the Government of Pakistan and the Government of Azerbaijan on February 28, 2017 for cooperation in the field of energy, and PLL and State Oil Company of Azerbaijan Republic (SOCAR), SOCAR Trading and its subsidiaries have been nominated to negotiate necessary contractual details on LNG project.

The proposed Framework Agreement does not contain any specific pricing formula and the LNG price will be quoted for each cargo by SOCAR in USD/ MMBTU. PLL will evaluate the offered price in comparison with the prevailing international price, as well as, consult downstream customers (power sector) to ensure affordability.