ISLAMABAD: With the involvement of top-level leadership, Pakistan and Azerbaijan have shielded a G2G framework agreement they signed in July last year for the supply of Liquefied Natural Gas (LNG) without competitive bidding after a brief hiccup.

The state-run Pakistan LNG Ltd (PLL) on Wednesday announced that it had secured LNG cargo from the State Oil Company of the Azerbaijan Republic (Socar) Trading for delivery in February under the G2G Framework Agreement.

The company did not disclose the cargo price.

Informed sources said the price would automatically become public in the next month’s regasified-LNG (RLNG) sale price but the bilateral price confirmed by Socar Trading was about $11 per million British thermal unit (mmBtu) — reasonably lower than spot cargoes already booked for the current month.

The bilateral agreement had come under shadow after PLL in a recent month shared Socar’s price with bidders of spot cargoes for a price cut in violation of the framework agreement. The agreement between Socar Trading and PLL was salvaged with the involvement of the prime ministers of Pakistan and Azerbaijan because of the long-standing brotherly relations. The violators, however, remained off the hook.

PLL managing director Masood Nabi did not respond for comments. The Petroleum Division announced “the successful procurement of a second LNG cargo from the Socar under the G2G Framework Agreement between PLL and Socar”, adding the cargo was scheduled for delivery in February, further strengthening the energy partnership between the two countries.

In July 2023, PLL and Socar signed a Framework Agreement under the G2G arrangement, marking a significant milestone in the bilateral energy cooperation between the two countries. The agreement stipulates that Socar may offer one LNG cargo per month to PLL, while PLL’s acceptance of these offers is subject to the demand for LNG in Pakistan and commercial considerations, ensuring a reliable and consistent supply of LNG to meet the country’s growing energy demands.

The successful delivery of the first cargo under this agreement in December 2023 demonstrated the commitment of both PLL and Socar to fulfilling the terms of the Framework Agreement and fostering a mutually beneficial partnership, the petroleum division said, adding that the second LNG cargo further solidified this partnership and underscored the importance of reliable energy supplies for Pakistan during the winter months, the statement maintained.

Published in Dawn, January 18th, 2024