By SKM
February 20, 2025
ISLAMABAD: Prime Minister Shehbaz Sharif is all set to leave for Azerbaijan for a two-day official visit on February 24-25 with a focus on increasing bilateral trade ties to a reasonable level.
In the upcoming visit of Prime Minister of Pakistan, the top officials said, both countries are likely to sign the agreement on the establishment of an international trading company in Singapore as a Joint Venture between Pakistan State Oil (PSO) and Azerbaijan’s SOCAR. The federal cabinet has already ratified the decision of ECC approving the establishment of an International Joint Trading Company in Singapore, a collaborative venture between Pakistan State Oil (PSO) and the State Oil Company of Azerbaijan Republic (SOCAR).
This will be the first ever company to be set up by PSO in Singapore for trading of LNG and other energy products. PSO will soon deposit $0.5 million in any bank in Singapore for the registration of its company. Now the government has come up with the idea of setting up the trading company in Singapore in joint Venture with SOCAR for purchasing LNG in the spot market setting aside PPRA rules. SOCAR is already in LNG business in the international market and PSO can take advantage of the links SOCAR has for thriving in the international market.”
However, the issues like percentage of shareholding between the two entities and how the trading company will run are being looked into.
Both sides would also sign for an extension of the agreement between Pakistan LNG Limited (PLL) and SOCAR on offering a distressed LNG cargo per month. Pakistan authorities want this agreement should last for 5 years. Earlier the said agreement to this effect was signed for two years.
There is another proposal under which PSO will purchase one cargo of petrol from SOCAR, but authorities in Pakistan want the price of Mogas from SOCAR should be less than the price it is getting from existing sellers. If any positive progress is made to this effect, both countries may also sign the agreement on purchasing the Mogas during the visit of the Premier.
In addition, Pakistan wants Azerbaijan to invest in the white oil pipeline to be laid down from Machike, Punjab to Taru Jabba in KPK for transportation of finished products. However, OGRA has determined the transportation tariff of this pipeline in Pak Rupees. The officials from Azerbaijan want the tariff should be in US currency. They also want the minimum petroleum products flow in the pipeline should not be less than 3 million tones and if this throughput goes down, then tariff would go high. However, FWO which owns the project wants the Azerbaijan’s company to become part of the project.
“The trade between the two countries is not up to the mark which can be gauged from the trade figures which say Pakistan’s exports to Azerbaijan were valued at approximately $5.64 million in 2023. In 2022, the total bilateral trade between Pakistan and Azerbaijan amounted to $52.3 million, with Pakistan’s exports at $26.1 million and imports at $26.2 million, top officials told Excusivewaves.com.pk.
“Notably, in February 2024, Pakistan signed a significant agreement with Azerbaijan for the sale of JF-17C Block-III fighter jets, valued at $1.6 billion. In July 2024, during the visit of Azerbaijan President Illham Aliyev to Pakistan, both countries agreed to enhance the bilateral investment level of up to $2 billion in areas of mutual beneficial projects.”
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