KARACHI: In a significant development for Pakistan’s oil sector, Pakistan State Oil (PSO) and Azerbaijan’s largest state-owned oil company, SOCAR, have signed multiple Memorandums of Understanding (MoUs) to enhance energy security and infrastructure.
Overall, four MoUs have been signed on Monday in Azerbaijan by the PSO. As part of the agreements, PSO and SOCAR will establish a Joint Trading Company in Singapore to strengthen Pakistan’s energy supply chain and capitalize on global market opportunities.
Additionally, PSO and SOCAR, alongside the Frontier Works Organization (FWO), inked an MOU to expand Pakistan’s oil pipeline network, addressing the country’s limited pipeline-based fuel transportation.
Until JV firm is formed: PSO to leverage SOCAR’s network in Singapore
An MOU has been signed between PSO, FWO and other partners wherein SOCAR is invited as a potential equity partner. The aim is to connect the north of the country with pipeline infrastructure. Currently, less than a third of all oil movement is through pipelines in Pakistan, presenting an opportunity to expand the pipeline network.
Tripartite MoU between PSO, PRL and SOCAR also signed to set out the basic principles with respect to the area of cooperation concerning Project Management Consultancy support and technical services in refinery modernization, as well as new initiatives, covering experience and knowledge related to feasibility studies & scope definition, technical advisory matters, risk assessment & mitigation and procurement & contracting support.
In addition, PSO and SOCAR have also signed a Government-to-Govern-ment (G-to-G) Strategic Partnership Agreement (SPA) to strengthen their bilateral energy cooperation.
These historic agreements have been signed in connection with the Prime Minister of Pakistan Mian Shahbaz Sharif visit to Azerbaijan and PSO has formally notified the Pakistan Stock Exchange (PSX) on Monday about these developments, highlighting plans to expand oil pipeline infrastructure.
Industry sources said that these agreements mark a significant step in Pakistan’s energy security strategy, fostering regional partnerships and accelerating investment in the oil and gas sector.
The PSO Board of Directors has already approved the pipeline project in collaboration with SOCAR, making it Pakistan’s first long-distance oil pipeline developed through foreign investment and local partnership, they added.
Copyright Business Recorder, 2025
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