Pakistani ministerial delegation visiting Azerbaijan to negotiate buying POL products

A Pakistani delegation made up of three ministers is on an official visit to Azerbaijan, Azernews reports.

The delegation includes Federal Minister of State for Petroleum Musadik Malik, Minister of Board of Investment and Special Initiatives Chaudhry Salik Hussain, and Minister of Industries and Production Syed Murtaza Mahmood.

The visit started on February 18 and will continue until February 23. The purpose of the visit is to negotiate importing petroleum, oil, and lubricant (POL) products, and to agree on liquefied natural gas (LNG) supplies at affordable prices.

As a senior official at the Pakistani Energy Ministry told the local media, in 2016, Azerbaijan had submitted an offer to Pakistan for providing finished POL products and LNG on two credit lines of $220 million.

“Both countries earlier inked an Inter-Governmental Agreement (IGA) in 2017 under which Azerbaijan’s state-owned SOCAR was supposed to provide oil and gas products, including furnace oil, petrol, diesel, and liquefied natural gas (LNG). SOCAR to this effect had offered two separate credit lines of $120 million for LNG and $100 million for petroleum products for 60 days,” the official said.

"In addition, the official said, the Petroleum Division had not availed itself of the offer for import of liquefied natural gas (LNG) on credit because its price at that time was ‘substantially more’ as compared to the-then price of spot cargoes and term cargoes from Qatar. Azerbaijan State Oil Company (SOGAR) also expressed frustration many times over the Petroleum Division’s prolonged silence.

Besides, in July 2021, Pakistani Ambassador to Baku Bilal Hayee also alerted the Pakistani government over the issue in question.

"Now Pakistan, facing an acute dollar liquidity crisis, wants a deal with Azerbaijan for the import of Mogas on credit, and to this effect, Pakistan’s state-owned Pakistan State Oil and Azerbaijan’s SOCAR have held meetings in the recent past.

“We will seek 1-2 cargoes of Mogas (Automotive gasoline) a month from SOCAR,” the official said.

As far as the LNG offer from SOCAR is concerned, the official said that the firm has no LNG with it as it is over-committed with European countries. However, Pakistan LNG Limited (PLL) is in talks for an agreement with SOCAR for providing Pakistan a distressed LNG cargo at affordable prices if compared with the current market prices.