Pakistan to sign ‘historic’ LNG agreement with Azerbaijan on July 24

KARACHI: Minister of State for Petroleum Musadik Malik on Saturday announced that Pakistan will sign a ‘historic’ liquefied natural gas (LNG) purchase agreement with Azerbaijan on July 24, ARY News reported.

Speaking to journalists in Karachi, the state minister pointed out that the country will procure one spot liquefied natural gas (LNG) cargo from Azerbaijan every month.

“The government will also purchase 12 LNG cargo ships from Azerbaijan,” Musadik Malik noted, adding that the government will purchase natural gas at cheaper price than the market rate.

In addition to the LNG contract, Malik revealed that $14 billion investment agreement with Saudi Arabia in refinery sector will be signed before the incumbent government completes its term.

The minister also expressed his opposition to providing cheap gas to the fertiliser sector. He proposed the removal of subsidies to the fertiliser industry and advocated redirecting these benefits to the farmers directly.

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Musadik Malik claimed the fertiliser sector consumes around 1500 MMcfd gas in the country and their agreements for cheap gas are reaching expiry.

He noted that new contracts for supplying gas to the fertiliser sector will be negotiated on different terms to ensure a more equitable and efficient system.

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Earlier in June, Bloomberg reported that Pakistan failed to secure liquified natural gas (LNG) from the spot market in its first attempt in about a year, as no supplier seems to budge to the cash-strapped nation’s offer.

Traders, on the condition of anonymity, told the publication that Pakistan LNG Limited’s (PLL) bid to purchase six shipments for October to December closed Tuesday with no companies responding to the offer.

The report said that many overseas banks weren’t accepting letters of credit Pakistani counterparts to purchase LNG shipments, making suppliers reluctant to offer cargoes, Bloomberg reported last week.

Pakistan’s inability to buy gas will aggravate energy shortages in the country, increasing the frequency of blackouts and curbing the supply of fuel to industrial consumers.