KARACHI: State Minister for Petroleum Dr Musadik Malik announced Saturday that the government is set to finalise an accord with Azerbaijan to purchase cost-effective liquefied natural gas (LNG) within the next few days.
During a media interaction in Karachi, the minister gave insights into the agreement, highlighting its benefits for Pakistan.
He said the deal allows the government to buy LNG when necessary, but it also grants them the “right of refusal” if not required.
Furthermore, Malik noted, the purchase of LNG will be contingent on its affordability in comparison to other energy sources.
The minister said that the availability of sufficient foreign exchange reserves will also influence the decision to buy.
The minister said the gas purchase would be considered if it proves cheaper, based on a thirty-day average of two international LNG standards.
He also extended the opportunity to private industry to procure cheap LNG, making it accessible to both large and small industries. However, he firmly stated that the resale of this cheap LNG would not be permitted.
In response to the demand of petroleum dealers to increase the margins on petroleum products, Dr Malik clarified that the margins would be tied to the wages of employees and their working hours at the petrol pumps.
A final report on the dealers’ margins will be released on Monday, he said, adding that dealers must comply with all the conditions if they wish to receive an increase in their margins.
The Petroleum Division has commenced the data collection process for petrol pumps across the country, and this exercise is expected to be completed by Monday, the state minister added.
Energy crisis-hit Pakistan received LNG shipments offer for the first time in more than one year earlier this month — in an achievement after winning unlocking the International Monetary Fund (IMF) loan.
Last month, Pakistan failed to secure LNG from the spot market in its first attempt in about a year, as no supplier seems to budge to the cash-strapped nation’s offer.
Pakistan has two long-term supply deals with Qatar, one signed in 2016 for 3.75 million metric tons of LNG a year, and another signed in 2021 for 3 million metric tons a year.
It also has an annual portfolio contract with ENI for 0.75 million metric tons a year.
In 2022, Pakistan’s imports of LNG slowed to 6.93 million metric tons for the year, down from 8.23 million metric tons in 2021, according to data from data analytics group Kpler.
