Pakistan State Oil Company Limited (PSO), the country’s largest fuel marketing company, has announced the approval and execution of a Sale Purchase Agreement (SPA) with the State Oil Company of the Republic of Azerbaijan (SOCAR). The development was disclosed in a notice to the Pakistan Stock Exchange (PSX) on Thursday.

The agreement follows the Economic Coordination Committee (ECC)’s approval and subsequent ratification by the Federal Cabinet. According to the notice, the Ministry of Energy (Petroleum Division) informed PSO of the ECC’s decision through a letter dated December 3, 2024, and directed the company to finalize the SPA with SOCAR at the earliest.

PSO’s Board of Management (BoM) recently approved the execution of the agreement, and the signed SPA was received from SOCAR on December 24, 2024. The company stated that the formal execution of the agreement will take place in due course.

This agreement makes PSO the second Pakistani company, after Pakistan LNG Limited (PLL), to import energy products from SOCAR. Last month, the ECC approved the signing of the SPA for the supply of petroleum products between PSO and SOCAR, further strengthening energy cooperation between Pakistan and Azerbaijan.

The partnership builds on a landmark LNG purchase agreement signed between PLL and SOCAR in July 2023. Under the framework, SOCAR offers one LNG cargo per month to PLL, with acceptance based on Pakistan’s LNG demand and commercial considerations. This agreement ensures a reliable supply of LNG to meet the country’s growing energy needs.

Currently, Pakistan fulfills more than half of its LNG requirements through long-term contracts with Qatar, while the remaining deficit is addressed through spot cargo purchases.