BAKU, Azerbaijan, July 24. Pakistan and Azerbaijan will sign an intergovernmental agreement today for the supply of liquefied natural gas (LNG), Trend reports citing a source familiar with the matter.
Azerbaijan’s state oil company SOCAR currently buys and sells LNG across a wide geography, including the Mediterranean basin, Asia, and other regions. The LNG is procured from third parties and is not exported from Azerbaijan due to the lack of a direct route to the world's oceans.
Earlier, Pakistan’s State Minister for Petroleum Musadik Malik said that LNG purchase agreement framework with Azerbaijan would effectively resolve the gas crises.
When questioned about the gas shortage issue, he assured that measures would be taken to effectively manage gas supply during the winter season, mitigating any potential shortages.
Reportedly, the agreement obligates Azerbaijan to offer a monthly batch of LNG at the lowest price in the global market and Pakistan has the option to accept or reject the offer without providing any reasons. To ensure transparency, the Pakistani Cabinet has approved an algorithm that guarantees the LNG cargo will be offered at the most competitive price.
This algorithm establishes several eligibility criteria, including requirements for the quality of the LNG fuel, price competitiveness compared to other fuel sources during the month, and the availability of sufficient foreign currency to make the purchase. Additionally, the proposed price must be lower than the average price of LNG indices over the previous 30 days and should be the lowest price available on the day of the cargo offer.
Pakistan has the right to refuse all 12 cargoes offered during one year without giving any reasons.
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