Pakistan signs gas supply agreement with Azerbaijan

The Pakistan State Oil (PSO) has announced approval and execution of a Sale Purchase Agreement (SPA) with the State Oil Company of the Republic of Azerbaijan (SOCAR). 

The agreement aims to boost supply of petroleum products in Pakistan.

In a notice to the Pakistan Stock Exchange (PSX) on Thursday, PSO said that its Board of Management (BoM) approved the agreement after approvals from the Economic Coordination Committee (ECC) and the Federal Cabinet.

In a letter dated December 3, 2024, the Ministry of Energy (Petroleum Division) informed PSO of these endorsements and told it to expedite the signing process. The PSO said, “The signed agreement has been received from SOCAR on December 24, 2024.” 

The agreement’s execution is set to proceed shortly, with the SPA enabling the supply of petroleum products from SOCAR to PSO. This agreement makes PSO the second Pakistani entity, after Pakistan LNG Limited (PLL), to sign a deal with the Azerbaijani energy giant.

Last year, PLL and SOCAR signed a framework agreement for LNG imports, offering a reliable monthly supply contingent on Pakistan’s demand and commercial viability. Pakistan currently meets the majority of its LNG needs through long-term contracts with Qatar, while spot cargo purchases address shortfalls.

The SPA between PSO and SOCAR underscores Pakistan’s ongoing efforts to diversify its energy partnerships and ensure a consistent supply of petroleum products to meet domestic demand.