Karachi, February 24, 2025 – Pakistan and Azerbaijan have strengthened their energy sector collaboration by signing a Memorandum of Understanding (MOU) on Monday for the establishment of a joint oil trading company.
The agreement marks a significant step in securing Pakistan’s energy needs while expanding cooperation with Azerbaijan in the oil and gas sector.
According to a communication shared by Pakistan State Oil (PSO) with the Pakistan Stock Exchange (PSX), PSO and the State Oil Company of Azerbaijan Republic (SOCAR) have formally agreed to establish a Joint Trading Company (JTC) in Singapore. This strategic initiative aims to bolster Pakistan’s energy supply chain while leveraging global market opportunities. The signing ceremony took place in Baku, Azerbaijan, symbolizing a new era of energy collaboration between the two nations.
MOU for FWO Pipeline Expansion
An additional MOU was signed in Baku, Azerbaijan, between PSO, Frontier Works Organization (FWO), and other partners, inviting SOCAR as a potential equity partner. This partnership aims to enhance Pakistan’s energy infrastructure by expanding the country’s oil pipeline network, particularly in the northern region. Currently, less than one-third of oil transportation in Pakistan occurs through pipelines, presenting a significant opportunity for development in this sector.
Tripartite Agreement for Refinery Modernization
In another crucial development, a tripartite MOU between PSO, Pakistan Refinery Limited (PRL), and SOCAR was signed in Baku, Azerbaijan. The agreement outlines cooperation on refinery modernization and new initiatives, including feasibility studies, technical advisory support, risk assessment, procurement strategies, and contracting services. This collaboration is expected to enhance Pakistan’s refining capabilities with Azerbaijan’s technical expertise.
SPA Between PSO & SOCAR – Acknowledgment Letter Signed
Further to the communication shared in a previous letter dated December 26, 2024, regarding the signing of the Sales and Purchase Agreement (SPA) between PSO and SOCAR under a Government-to-Government (G-to-G) arrangement, an official letter of acknowledgment has now been signed in Baku, Azerbaijan, reaffirming the commitment of both parties to this strategic partnership.
This information is being shared in compliance with Section 96 of the Securities Act, 2015, and Clause 5.6.1(a) of the PSX Regulations for dissemination among the members of the Pakistan Stock Exchange Limited. The collaboration between Pakistan and Azerbaijan is expected to yield long-term benefits for both countries in the energy sector, strengthening economic ties and ensuring energy security.