Tazeen Akhtar
ISLAMABAD/ BAKU : 15 June 2023 – Pakistan and Republic of Azerbaijan have finally decided to mature a long pending offer of SOCAR oil company of Azerbaijan to provide LNG on discounted rates. SOCAR a commercial arm of the State Oil Company of Azerbaijan Republic had offered a supply of petrol and LNG cargoes to Pakistan LNG Ltd (PLL) and Pakistan State Oil (PSO) round the year on credit under a government-to-government (G2G) arrangement in Jan 2021 during the government of Imran Khan but this offer was not responded from Pakistani side.
SOCAR Trading had won the tender and confirmed the delivery of an LNG cargo on Feb 15-16 window, was surprised to hear a reference to default on this delivery as no such action had taken place, and the load was scheduled to arrive in Pakistan as contracted.A SOCAR Trading spokesperson confirmed that SOCAR had offered petrol and LNG supplies on a long-term basis, and the offer was based on commercially acceptable terms to both sides and never involved any undue pressure applied by any of the parties. The then government of Pakistan failed to address the matter and faced sever criticism of not placing the timely orders for the supply of LNG from abroad. Same mismanagement was observed in case of LNG from Qatar as well.
The Prime Minister Shehbaz Sharif and the President Ilham Aliyev met in Baku on 15 June to discuss the whole ambit of bilateral cooperation. Both leaders agreed to take bilateral cooperation in energy, trade, defense and other sectors to the next level. Pakistan has recieved cheap oil from Russian Federation last week and yet another good news comes from Baku after the meeting of both leaders. Azerbaijan will provide LNG on discounted rates.
The details of the consensus between two leaders are as under:
Discounted LNG cargoes from Azerbaijan will start arriving in Pakistan from next month. Cabinet has approved to bring LNG from Azerbaijan to Pakistan, Prime Minister Shehbaz Sharif informed the President of Azerbaijan Ilham Aliyev in a meeting in Baku.
Prime Minister Shehbaz Sharif was working on this deal for the last six months.After the approval of the federal cabinet, the formal implementation of this deal will begin. National LNG Company of Azerbaijan will send one LNG cargo to Pakistan every month at discounted price
The two countries also agreed to expand mutual cooperation in trade, energy, agriculture, transport, defense, investment and other sectors. Azerbaijan will help Pakistan in oil and gas sector. Pakistan State Oil (PSO) and Azerbaijan’s company SOCAR will play an active role in meeting Pakistan’s energy needs at the government level.
Azerbaijan will invest in Pakistan in solar energy sector. Prime Minister Shehbaz has already started the conversion of traditional systems of electricity into solar energy. Pakistan is encouraging the use of Solar as policy initiative that is receiving encouraging response from the public.
Azerbaijan has agreed to develop an integrated system of assessment of import duty on rice from Pakistan. Azerbaijan has already given exemption on import duty on rice imported from Pakistan.
Azar Airlines will operate two flights to Islamabad and Karachi. This is reciprocal to the initiative of Pakistan International Airlines that took a lead in connecting two brotherly countries with direct flights last year. Later the PIA flights were suspended because of low number of Pakistani travelers but the administration justified it as COVID-19 phenomenon. The Chairman of PIA was very enthusiastic to sustain the flights but his efforts could not become fruitful.
Pakistan was the second country in the world to recognize Azerbaijan first after independence.On March 1, 2017, Prime Minister Nawaz Sharif and President Ilham Aliyev signed a cooperation agreement for procuring defense products on the sidelines of the ECO meeting.
Statement of Understanding to Boost Trade Relations
The Ministry of Economy of the Republic of Azerbaijan and the Ministry of Commerce of the Islamic Republic of Pakistan, represented by Minister Mikail Jabarov and Minister Syed Naveed Qamar, respectively, signed a significant Statement of Understanding aimed at enhancing bilateral trade cooperation.
The signing ceremony took place in Baku, Azerbaijan, during a state visit by the Prime Minister of Pakistan, Muhammad Shehbaz Sharif. The Statement of Understanding establishes a framework for fostering closer collaboration between Azerbaijan and Pakistan and promoting trade between the two countries.
Recognizing the importance of expanding their friendship and economic partnership, the Ministers expressed their dedication to diversifying trade and enhancing economic development through this agreement. Under the agreement both countries will collaborate to create favorable conditions for bilateral trade by sharing trade information, organizing events, conducting studies to identify exportable products, and promoting economic cooperation.
For this purpose both countries agreed to mobilize their efforts to finalize a Preferential Trade Agreement by early August of 2023. The Ministers expressed their enthusiasm and optimism for the future of Azerbaijan-Pakistan trade relations. They emphasized the potential benefits that the preferential trade agreement would bring and affirmed their commitment to working collaboratively to realize the shared goals outlined in the Statement of Understanding.
The signing of this agreement marks a significant milestone in the economic partnership between Azerbaijan and Pakistan, strengthening the foundation for increased trade and economic cooperation. It is expected to create new opportunities for businesses, enhance bilateral investment, and contribute to the overall growth and prosperity of both nations.
