PSO and SOCAR agree to establish a joint trading company based in Singapore

Pakistan State Oil Company Limited (PSO) and the State Oil Company of Azerbaijan Republic (SOCAR) signed a Memorandum of Understanding (MOU) on Monday to establish a Joint Trading Company (JTC) in Singapore, a bourse filing said on Monday.

This move aims to secure Pakistan's energy supply chain while capitalizing on market opportunities.

The signing ceremony took place in Baku, Azerbaijan, during a visit by Pakistan's Prime Minister Shahbaz Sharif.

An additional MOU was signed between PSO, Frontier Works Organization (FWO), and other partners, inviting SOCAR as a potential equity partner.

This initiative seeks to connect northern Pakistan with pipeline infrastructure, addressing the fact that less than a third of oil movement in the country is currently via pipelines.

PSO/PRL and SOCAR also signed another MOU to outline cooperation in project management consultancy support and technical services for refinery modernization. This agreement encompasses feasibility studies, technical advisory, risk assessment, and procurement support.

In a related development, PSO and SOCAR signed a letter of acknowledgment in Baku, referring to their previously announced agreement under a government-to-government arrangement, dated December 26, 2024.

PSO had entered into a sale purchase agreement with Azerbaijan's state-run oil company, SOCAR, to secure Liquefied Natural Gas (LNG) cargo on an as-needed basis.

Pakistan typically imports between 120 and 140 LNG cargoes annually, with the majority (approximately 85-100) coming under long-term contracts with Qatar.

The country has not imported spot cargoes for nearly a year due to surplus electricity capacity and a decline in consumption, which has ranged from 2% to 18% in different months.