ISLAMABAD: Pakistan and Azerbaijan are likely to sign an oil and gas trade deal during the visit of Azerbaijan’s president at the end of the current month.
Following the signing of an inter-governmental agreement for energy cooperation, the two sides will also explore a commercial contract to execute the proposed oil and gas trade deal. The two countries have already agreed on a draft government-to-government agreement for the energy sector and the cabinet has endorsed the draft.
Foreign Affairs and Law and Justice Divisions have also cleared the draft from political and legal points of view.
Azerbaijan President Ilham Aliyev will arrive in Pakistan on February 26.
“Azerbaijan has offered export of crude oil, petroleum products and liquefied natural gas (LNG) to Pakistan,” said a senior official of the Ministry of Petroleum and Natural Resources.
It has also expressed interest in constructing a terminal as well as LNG and liquefied petroleum gas (LPG) storages in a joint venture between Azerbaijan’s state oil company Socar and a Pakistan-designated company.
Prime Minister Nawaz Sharif had approved a proposal on March 10, 2015 for the start of negotiations with Azerbaijan on a memorandum of understanding (MoU) for mutual cooperation in the area of oil and gas exploration and production.
In the sixth session of the Pakistan-Azerbaijan Joint Economic Commission held in April 2016, both sides agreed to promote investment opportunities in the energy sector including exploration and production of oil and its products, broaden cooperation in the supply of crude oil and its products and set up an LNG and LPG terminal in a joint venture between nominated enterprises of the two countries.
The prime minister had allowed the Ministry of Petroleum to negotiate with energy companies of different countries including those of Azerbaijan. During negotiations, Pakistan and Azerbaijan agreed on an inter-governmental draft agreement.
Pakistan and Azerbaijan have also agreed on conducting joint research by setting up a laboratory and undertaking oil and gas production tests.
Furthermore, they will share scientific and technological developments in oil and gas exploration and production, while also committing to the training of professionals working in the petroleum industry.