Azerbaijan, Pakistan to sign memorandum on LNG supplies

Today Pakistan and Azerbaijan will sign an intergovernmental agreement on liquefied natural gas (LNG) supplies.

Pakistani media outlet The News notes that the agreement will be signed between state-owned Pakistan LNG Limited (PLL) and SOCAR Trading Company-UK, a subsidiary of the Azerbaijan State Oil Company (SOCAR).

Pakistan Prime Minister Shahbaz Sharif is also expected to attend the signing ceremony,  Report informs citing the agency.

The agreement will be signed for a period of one year with an option to extend it for another year. Under the agreement, SOCAR Trading Company-UK will offer one shipment of LNG 45 days prior to the opening of the relevant delivery window and each cargo offer will have a set validity period during which PLL can accept the offer.

Pakistan will have the option to accept or reject the offer without giving any reason. To ensure transparency, the Pakistan Cabinet has approved an algorithm to ensure that LNG supplies are offered at the most competitive prices.

As per the agreement, the price will be offered in US dollars per MMBtu for each shipment 45 days prior to the respective delivery window. The LNG cargo quantity will be 3.2 million MMBtu +/- 5% and payment will be made within 30 days of receipt of the PLL invoice.

This agreement gives Pakistan a unique opportunity to purchase low-cost LNG from anywhere in the world through Azerbaijan's extensive trading network.