State-owned Pakistan LNG has signed a deal to buy liquefied natural gas from Azerbaijan’s Socar.
The framework deal was signed in Lahore, Pakistan on Monday.
Pakistan’s Prime Minister Shehbaz Sharif said after the signing ceremony that the agreement is one for year but it can be extended for another year.
According to several media reports in Pakistan, Azerbaijan will offer one shipment of LNG per month as part of the deal, and it will be up to Pakistan to accept or reject the cargo.
Sharif said that there will be no financial consequences if Pakistan refuses to accept the LNG cargo, the reports said.
Pakistan LNG said last week that it received two offers for spot cargoes with delivery in January 2024 from commodity trader Trafigura.
Trafigura offered a price of $23.4711/MMBtu for the January 3-4 delivery and $22.4722/MMBtu for the February 23-24 delivery, the firm said.
This Trafigura offer is the first bid for spot LNG cargoes Pakistan received for its tenders in about a year as Europe took most of the available spot cargoes last year.
The firm also issued a tender for six deliveries in October and December, but it received no offers for this tender.
Pakistan gets most of its supplies under long-term contracts from Qatar and on the spot market to fuel its power plants, however, last year prices surged and Europe took most of the spot supplies.
Spot prices dropped considerably this year, prompting Pakistan and other Asian countries to return to buying spot LNG.
Pakistan currently imports LNG via the FSRU BW Integrity which serves Pakistan GasPort’s terminal in Port Qasim, Karachi, and the Energo Elengy facility, served by the FSRU Exquisite.