Pakistan on Wednesday approved an liquefied natural gas (LNG) purchase agreement framework with Azerbaijan, the South Asian country’s finance ministry said.

The South Asian country has not procured any spot cargos of LNG for about one year after global prices spiked last year following Russia’s invasion of Ukraine.

That left the nation of 220 million to bear widespread hours-long power outages with the shortage of the gas, which Pakistan uses to fire many of its power plants.

An acute balance of payments crisis, with the central bank’s foreign reserves so low as to cover barely a month of controlled imports, left Pakistan unable to compete in the high-priced LNG market.

Islamabad, however, earlier this week issued tenders to seek two spot LNG cargos.

Asian spot LNG prices LNG-AS this year have eased from record highs of $70/mmBtu hit in August, and are now trading below $10.

The approval for the deal came at a meeting of the Economic Coordination Committee (ECC) of Pakistan’s finance ministry, which gave the go-ahead for “the framework agreement between Pakistan LNG Limited (PLL) and State Oil Company of Azerbaijan Republic (SOCAR).”

No details of the deal have been made public.

Pakistan’s Petroleum Minister Musadik Malik said on Tuesday that Azerbaijan will be supplying one LNG cargo every month at a cheaper price than the market. Azerbaijan’s SOCAR Trading will fulfil the LNG supply.

He did not disclose as to when this monthly supply would begin.
Source: Reuters (Reporting by Asif Shahzad, Editing by Louise Heavens and Chizu Nomiyama)