ISLAMABAD: The President of Azerbaijan said he would sign an MoU with Pakistan for the promotion of trade and the two nations would prepare a list of preferential trade items, state-run Radio Pakistan reported on Thursday during Prime Minister Shehnaz Sharif’s visit to the transcontinental country.
Sharif, accompanied by the state minister for petroleum, Musadik Malik, left for Baku on Wednesday afternoon and later in the day Pakistan approved a framework agreement for the import of Liquefied Natural Gas (LNG) from the State Oil Company of Azerbaijan Republic (SOCAR), which is expected to arrange a $120 million credit line for the commodity.
On Thursday, addressing a joint press conference after Sharif met President Ilham Aliyev, the two countries said they would enhance bilateral trade and promote cooperation, particularly in energy and defence.
“President of Azerbaijan said an MOU will be signed for promotion of trade. A list of preferential trade items will also be prepared,” Radio Pakistan reported, adding that three delegations from Azerbaijan would “soon” visit Pakistan: one to discuss the promotion of trade and investment, a second to deliberate on energy cooperation and the third on defence ties.
“Aliyev said we have agreed to increase the number of flights between the capitals of the two countries,” Radio Pakistan said. “Both sides have also discussed cooperation in defence and agreed to enhance the number of military exercises.”
Sharif in his remarks said there was “great scope of cooperation” between the two countries in the field of energy and petroleum products.
“Pakistan has a great potential in solar energy and looks forward to cooperation in this realm,” Radio Pakistan reported.
Sharif also thanked Azerbaijan for facilitating the enhancement of rice imports from Pakistan.
“We also welcome Azeri airline to start its operations between Baku and Islamabad,” Sharif said.
The LNG agreement framework with Azerbaijan has been under consideration since February this year.
“Under the framework agreement, [Pakistan] will [be] informed about the availability of cargoes and their prices,” a petroleum division official told Arab News on condition of anonymity since he was not authorized to speak to the media. “If it suits us, we will accept. Otherwise, we can reject without any liability.”
SOCAR is expected to arrange credit lines, which were offered back in 2016, with local banks and financiers. Pakistan is expecting credit lines of $120 million for LNG and $100 million for the import of oil, according to officials.
The agreement will allow the country to avail the deferred payment facility for 60 days.
Cash-strapped Pakistan has been out of the spot LNG market since June 2022 due to skyrocketing prices and depleting foreign exchange reserves, which dropped to $3.9 billion where it could not even provide an import cover of a month.
