Pakistan and Azerbaijan finally signed an agreement of LNG supply from Azerbaijan to Pakistan at one month deferred payment as offered by SOCAR in the past but Pakistan could not avail this offer for the time being for certain domestic political and other reasons. 24 July 2023 has become a historical day in terms of taking the bilateral relations to meaningful economic cooperation between two brotherly countries.
Prime Minister Muhammad Shehbaz Sharif on Monday witnessed the signing of a framework agreement between the State Oil Company of Azerbaijan Republic (SOCAR) Trading and the Pakistan LNG Limited (PLL). The framework agreement was signed by PLL Managing Director Masood Nabi and Chief Executive Officer of SOCAR Trading Mariam Almaszade.
Minister of State for Petroleum Musadik Malik, Punjab Governor Baleegh Ur Rehman, diplomats and government officials were also present on the occasion.
Under the framework agreement, the SOCAR Trading has offered supply one cargo per month of liquefied natural gas (LNG) to Pakistan on flexible terms and with the credit line for 30 days after delivery of the cargo in one year contract which is extendable by another year.
On 15 June 2023, Prime Minister Shehbaz and President Ilham met in Baku and 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 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.
Prime Minister Shehbaz Sharif said it was really a great day as “we are standing here as brothers from two brotherly countries – Pakistan and Azerbaijan”.
He expressed good wishes for President of Azerbaijan Ilham Aliyev whom he met in Baku few weeks ago and thanked him for finalizing the agreement.
“We had extremely productive and very fruitful discussion over there as to how to promote economic relations between the two friendly countries,” he said, adding immediately on his return to home, the Government of Pakistan accorded approval to the Azerbaijan Airline to land at Islamabad, Lahore and Karachi.This is a big step forward to promote tourism and investment, and exchange of delegations between the two countries, Prime Minister noted.
The prime minister also appreciated and thanked Finance Minister Ishaq Dar, Dr Musadik Malik, secretary petroleum, Pakistan’s ambassador in Azerbaijan, SOCAR Trading CEO, and PLL MD for their efforts to conclude the framework agreement.
The ambassador of Azerbaijan in Islamabad, H.E Khazar Nadir Oglu Farhadov on the occasion, said the framework agreement would help further strengthen bilateral economic relations.He said the cooperation between the two countries remained sustainable since the start of diplomatic ties.He said approval of giving airspace to the Azerbaijan Airline would increase the number of visitors and business delegations between the two counties.
A team of horticulture experts from Azerbaijan was arriving in Pakistan to share their first hand experience in the sector with the Pakistani authorities, he added.
Pakistan and Azerbaijan finally signed an agreement of LNG supply from Azerbaijan to Pakistan at one month deferred payment as offered by SOCAR in the past but Pakistan could not avail this offer for the time being for certain domestic political and other reasons. 24 July 2023 has become a historical day in terms of taking the bilateral relations to meaningful economic cooperation between two brotherly countries. 
