SOCAR and Pakistan Company Prepare Agreement Ahead of Pakistani Prime Minister's February Visit to Baku

SOCAR President Rovshan Najaf met with the Minister of State for Petroleum of Pakistan, Musadik Malik, on January 18.

According to SOCAR, the discussions covered joint energy projects, achieved outcomes, and cooperation opportunities in various areas, including the trade of petroleum products.

An informed source told Turan that in preparation for the visit of Pakistan's Prime Minister Shehbaz Sharif to Azerbaijan in the second half of February 2025, SOCAR and Pakistan State Oil (PSO) are finalizing a contract for the supply of petroleum products from third countries to Pakistan.

"The agreement involves the monthly delivery of one shipment of gasoline, specifically 50,000 tons, from logistically convenient countries. Price negotiations are ongoing," the source said.

If the agreement is signed in February, SOCAR could begin gasoline deliveries to Pakistan through its trading arm, SOCAR Trading, as early as spring.

It is worth noting that almost all gasoline produced in Azerbaijan is consumed domestically to meet local demand. SOCAR Trading has extensive experience in trading oil and petroleum products from third countries. In 2023-24, SOCAR Trading facilitated several shipments of liquefied natural gas (LNG) to Pakistan from third countries.

In October 2024, Pakistan's Economic Coordination Committee of the Cabinet of Ministers approved the signing of a contract for SOCAR Trading to supply petroleum products to Pakistan.

According to Pakistani experts, the country's deficit in petroleum products is projected to reach 9 million tons per year by 2030 and could increase to 14 million tons per year by 2035.

Pakistan has six refineries with a combined capacity of about 20 million tons per year. However, due to outdated equipment, they operate at half capacity, failing to meet the nation's demand for petroleum products.

In 2022-23, the Pakistani government invited Azerbaijan to participate in an ambitious project to build a refinery at the port of Gwadar (Gulf of Oman) with a processing capacity of 0.3 million barrels of oil per day and an estimated cost of $10–16 billion. However, Azerbaijan deemed the project commercially unfeasible.

Chinese and Saudi companies expressed interest in the Gwadar refinery project, but no agreements were reached.

In the summer of 2024, the Pakistani government proposed new initiatives to Azerbaijan. These included SOCAR's involvement in Pakistan Refinery Limited (Karachi), a gas storage project, and participation in the White Oil Pipeline project, as well as infrastructure for oil and gas liquefaction and exploration of offshore and onshore hydrocarbon structures.

"These ambitious projects are part of Pakistan's investment package proposals. While discussions are ongoing, it is unlikely that these proposals will be approved during the Prime Minister's February visit, as many issues remain unresolved," the source concluded.