Musadik Malik, Minister of State for Petroleum, revealed on Saturday that Pakistan will sign a ‘historic’ liquefied natural gas (LNG) purchase agreement with Azerbaijan on July 24.
Speaking to journalists in Karachi, the state minister stated that Azerbaijan will provide the country with one spot liquefied natural gas (LNG) cargo per month.
“The government will also purchase 12 LNG cargo ships from Azerbaijan,” Musadik Malik said, adding that the government will buy natural gas at a lower cost than the market pricing.
Aside from the LNG contract, Malik disclosed that a $14 billion investment agreement with Saudi Arabia in the refinery industry will be inked before the current government’s term ends.
The minister also stated his opposition to supplying cheap petrol to the fertilizers industry. He pushed for the abolition of fertiliser industry subsidies and the direct transfer of these advantages to farmers.
According to Musadik Malik, the fertilizer sector utilizes around 1500 MMcfd of petrol in the country, and their contracts for cheap petrol are about to expire.
He stated that new contracts for gas delivery to the fertilisers sector will be negotiated on different conditions in order to achieve a more equal and efficient system.
Earlier this month, Bloomberg reported that Pakistan failed to get liquefied natural gas (LNG) from the spot market in its first effort in about a year, as no supplier appears willing to accept the cash-strapped country’s offer.
According to traders who spoke on the condition of anonymity, Pakistan LNG Limited’s (PLL) auction to purchase six shipments from October to December ended Tuesday with no firms replying.
According to Bloomberg, many offshore banks were refusing to accept letters of credit from Pakistani counterparts to acquire LNG supplies, making suppliers hesitant to offer cargo.
Pakistan’s inability to purchase petrol will exacerbate the country’s energy difficulties, increasing the frequency of blackouts and limiting gasoline supply to industrial consumers.