Musadik confident of finalising Pakistan-Azerbaijan LNG deal within days

Islamabad also eyes continuous supply of Russian oil

KARACHI (Web Desk) – As Pakistan eyes cheaper sources to secure its energy needs, State Minister for Petroleum Dr Musadik Malik said the government was in process to finalise the LNG deal with Azerbaijan in the coming days.

At the same time, Malik also claimed that the progress was being made on attracting $10 billion investment from Saudi Arabia for establishing an oil refinery in Pakistan.

The statement comes as reports suggest that Pakistan is also mulling over ensuring continuous supply crude oil from Russia in an attempt to diversify the options which are presently revolve around the Gulf States only.

Malik again said that the cheaper LNG import from Azerbaijan would be according to the domestic demand and the available finances – a reference to the fact that the agreement is tilted towards the buyer.

He also said that the private sector was allowed to purchase cheap LNG but not to resale the commodity – a move that encourages public participation at a time when the government is facing serious paucity of resources.

The agreement with Azerbaijan envisages Baku will supply one shipment every month to Islamabad, with the buyer enjoying the option to accept or reject the offer as per its requirements.

Azerbaijan’s state-owned trading company SOCAR through its Pakistani counterpart PLL would supply a LNG cargo each month to Pakistan at a cheaper price than the global price at that time.

Earlier, Pakistan had received two crude shipments from Russia which were refined at the Pakistan Refinery Limited (PRL) in a trial run. Other market players – Pak-Arab Refinery (Parco) and private refineries – would also start receiving the shipments if the government secures continuous supply of Russian oil.

The imported fuel from Russia could be used after blending with Arabian light crude with a ratio of around 30 to 35 per cent, which means that the Russian crude could account for one-third of Pakistan’s fuel needs, experts say.

Malik had earlier said that the prices of petroleum products would start decreasing once continuous supply of oil from Russia was ensured.

There was going to be a huge difference in prices with the benefit being transferred to the masses when Pakistan would start meeting one-third of the domestic needs through the imported Russian oil.

“Our target is to get one-third of crude oil from Russia at discounted rate. When we will achieve the objective then the oil [petroleum products] would be available at cheaper price.”

The state minister, however, said, “I cannot share the actual price now. However, it would result in a massive difference.”