Secret

Copy No.-

No. LG-12(70) /2023-PLL

Government of Pakistan
Ministry of Energy (?etroleum Division)
*+****+
Summary for the ECC of the Cabinet
Subiect: F RE NT
PakistanStateoil(PSo)andPakistaflLNGLimited(PII)areimportingLiquefiedNatualGas
supply gap as pet following
(I_NG) under the long term LNG supply contracts to minimize the 9s demand
details;
Price (Slope of
Contract Dutation Catgoes / Month
Brent)

15 years 5 73.37%
PSO-Qatar Gas (2015)

10 years
Jd22 -Dec 23:3 70.20h
PSO- Qatar Gas (2021) Dec 32: 4
Jar 24 -
15 years 1 72.05%
PLL-Eni (2017)
have been impordng upto 3 LNG catgoes/month through spot
tendering
2. Itt addition, PII
However, PII- have been facing considerable
conducted from time to time to meet seasonal peak demand.
difficultiesinprocurementofspotLNGcatgocssinceJune2022,owingtoexorbitandyhighintemational
for ptocurement of LNG
LNG prices as -e11 u, p"kistun]s downgraded credit rating. PLL floated tendets
was received ftom LNG suppliers'
on spot buris for delivery in July to September 2)22,howevet,no bid
pT.I also floated a midtetm tendet for supply of 72 catgoes (1 catgo/month dunng 2023-28), which also
didn't atttact any biddet'
'3.Meanwhile,PTT'havealsobeenexploringavailabilityofLNGvolumethroughGovemmentto
Govemment(GtoG)agreementswithdifferentcorrnffies.Inthisregardanlntet-Govemmental
of Pakistan and Azetbaijan on 286
Agreement (IGA) has already been srgned betw-een the Govemments
pakistan LNG Limited (PLL) aod
nJu-ury zotn rotcoopetation iII tt,. a.ta of Enetgy (Annex-I) and
Trading and its subsidiaries have been
State Oil Company of Azerbzqan Republic (SOCAR), SOCAR
nominated to negotiate necessary coflftactual dctails on LNG pro)ect'

4.Irlthisregatd,PLLhaveinfomred(Annex-II)thatSoCARhasoffetedLNGcargoestltougha
under thc G-to-G atangemeot' PLL have requested
fot approval of
Framework Agteement (Annex-III)
the said Ftamework Agteement, having follorving salient features:

Term a Initial o ne ( 1 ) yezI elrn, exten da b 1c to anothef on e (1 ) yet

of 1 ING catgo per month, to be offered by SO CAR
45 days Prior to the start
Numbet a

Catgoes of the reievant delivelY window.

during which PLL may
a Each offer for the cargo will have a set validity pedod
accept the offet.
daYs Prior to the
Price Formula Price shali be offcred in USD/MMBIu for each catgo,45
relevant delivery rvindow
Cargo Quantity 3,200,000 MMBtu +/ 5%

Payment Terms a \7 thin 3 0 days fo llorvrng P LL S recelp t o f the lnvolce

Credit SuPPort a PII to issue Letter of Ctedit from local b ank(s)

a LC confumation charges shall be on Sellet's account
all PQA costs,
Port Chatges a Port Chatges for SOCAR capped at USD 5 00,000, whereas
including taxes, shall be dehned as Port Charges
 as a fixed
Demurrage Rate a Each Offer will include the applicable Demunage Rate expressed
amount in US Dollars Per daY and Pro rutz for ezch Part of
a daY;

Othet Terms a PII and SOCAI{ ivrll sign a Confumatioo Notice, at the time the offer for
atTy c tqo is accepted by PT r '

have constituted a LNG

5. ECC of the Cabiaet, vide case No. EC C-121/21, /2016, dated3l-70-2076'
Price Negotiation Committee (PNC) to nego trate the
LNG pdces and other important aspects including
review of dmft agreemeots telated to LNG imp orts under
G2G ftamewotk lts composition and TORs
ate attached at Annex-IV. The PNC considered the rlraft
framewotk agreement in its meeting held on
Agreemeot aftet approval of Federal
30th Novembet 2022 arrd agreed on executiol o f the Framework
to evaluate the price offered as well as LC
Government. PNC also advised PLL to formulate a mechanism
ate attached as Annex-V'
confumation charges for each cargo Miflutes of the meeting
the LNG
6. The proposed Framework Agreement does not contain any specific pticing fotmula and
"by in
price will be quoted fot each ."rgo socAR in usD/MMBtu. PII \I/ill evaluate the offered price
as consult downstream customem (power sectot)
comparison with the prevailing inlemational price as well
Evaluation Mechanism for assessment of
to ensure affordability. Accordingly, PLL has developed a Price
its meeting dated 07-03-2022' This Price
price reasonability which hm bit' ^pp'ot'ec1 by the PNC in
Evaluation Mechanism was ,l.o p..rlrrt"d in the meeting
of the ECC dated 07-03-2023 wheteby it was
directed to make the price Irvaluation Mechanism part of
the sunmary fot a formal approval of ECC'
the minutes of the PNC meeting dated 01-03-2023 along
with the Prince Evaiuation
Consequently,
Mechanism is at Anoex-YI

T.Earlier,theSummarydzted2O-01-2023wassubmittedtoECCofthecabinetforconsideration
whichwasdeferredbyECCvidecaseno.E,CC2g/04/2023dated25.012023(Annex.VII)withthe
Division' Accotdingly, the case was
direction that Petfoleum Division to consult rvith Larv and Justice
had reiterated their earliet comments (Annex'vIII &
again refered to the Law andJustice Division who
IX).AssuchtheFnmewotkAgteementisbeingexecutedbetweenPLLandSoCARTradingSA(a
puchase Agreement (r{SPA) executed between PTT and
subsidiary of SocAR) undet Mi'ster Sale &
Comments of the Law Ministry have been
SOCAR Ttading UK (also a subsidiary of SOCAR)'
are in place'
incorporated PII *ill that contJactual arrangements for the ffansaction
"nJ ".,,ure which
Summary and Ftamework Agteement'
8. Since, there is no change in the sffucturc of original
pdme Minister as Minister in-charge of Petroleum Division
have already b"..r.e"n and up-proved by the
andauthorizedthesubmissionofth"'''t-uttotheECC'therefore'itisproposedthatECCmayallow
'Irading and evaluate the
PII to execute the proposed Framework Agreement vith SOCAR/ SOCAR
SOCAR Ttading as per the Ptice Evaluation
prices of LNG Cargoes to be offered by SOCAR/
2023'
M..hroi.- rpprorr.J by ,ht PNC in its meeting dated 1" Match
of the ECC of the Cabinet'
9. The proposal in para-8 is submitted fot consideration and approval
Division' (4 Planning'
10. The Summary was ckculatecl to (') Finance fot comments and (v) State
Developmert & Special Initiatives, (iii) Porver Division' 9]
t'* Division
at Annex lX to Annex XIII' t)
Bank of Pakrstan. Their commenrs zre attach(d
/ t,
tv})r
Muhammad Mahmood
Additional Sectetary flocharge)
Islamabad, the 25n l:|/raY 2023
 At ncr" -i
,

AGREEUENT
botwren the Govommant of the Ropublic of
Azerbaij.n end
the Govomment of lhc lslamlc Ropublic
o, paklstan
on cooporrllon ln the lteld of anargy

Tho Govemmenr or lhe Repubtb ot Azehaihn and rhe Govemment or rha rsramic
Republb ol Pakisten (hereinaffer lin y refermd lo as .!he pad,res, aff, sepau,lely
ds ihe Pady'|,

Oelemine<l lo fuJlher dewlop cooperalion in

the energy fiald,
Baing aware lhal auch cooporalion will b€nalil
the two countries.

Haya agrBed as ,ollows:

Artlcls I
Oblocdve
1.Th€ Perties wi0 ,urther develop bilat ral scientitic, technicat, technologicat,
legislative, adminbtralivs and commercial cooperation in the field
ot energy in
6c6rdanca with lheir national bglslations.

2.The Partaes will work rc$nuy in ojder to encourage inveslments in the lioH
energy in both countri8 and,/or in third countrtss.

3.The Parliss will encorEg€ the exchange o, htomation and knovr-hor. in

particular thror8h the rsinforcernont ol the reLtions b€tweon irEtihrtion6 and
companigs of lhe bolh countries op€rating in the lield of .nergy.

Artlcla 2
Fleldr ol CoopenUon
The Partiss will promots coop6ratbn in the folbwing fields of ene8y:

(a) devalopm€nt ol supply and ttading opporlunitiss of cluds oil, oil productE,
llluefEd netural gas (LNG) and lhu€H p€t ol€um gas (LPG). providing pinl
conslruction of terminal and storage lor LNG, LPG and oth€r hydrocaibons;

(b) encouraging investors to r,vo.k togeth6r lor promotion o, ptoiects of mulual

interest including Exploration ard Ptoduction (EEP) in Ptroleum seclor,

(c) Supply ot LNG in relation lo pou/sr proiecls and to othtr consumers.

l

Artic
i Competant Authoritie:
I
1 The cooadination and @atrol over the implemenlation of the presenl
Agreemant is to be p€rforrn€d by the tollowing competent aulborilies:
(a) From ttre Azerbaijani side
- th€ Ministry ot Energy of the Repubtic of
I Aze.baiian: and
(b) From the Pakistani side - ttre Ministry of petroleum and Natural
I Resources of lhe lslamic Republic ot pakistan.

ln case o, chaoge or substitution ot any competent authority. the concsmcd party

shall ndify in ffiting of this to the olher party via diplomatic caannels.

2. The Pa es hav6 nominated ths to[ov,ring entities {or the purpose of

execulion of lle proiects:
I

I
(a) From t!€
Azerbaiiani side, the State Oil Company of the Repubtic
A:erbaijan (SOCAR), SOCAR Tradiry and its subsidiary(ies):

(b) From the Pakistani side * Pakistan St6le Oit Company Umiled (PSOCL),
Pakistan LNG Limited (pLL), pakBtan LNG Terminal Limited (PLTL), oit & c.s
Developrnonl Company Limited (OGDCL), pakbtan petroteum Limited (ppl) ot
other relevant entilbs to b€ nominated by Pakislan, as the case msy bs.

3. The authodzed nomlnaM Bnlitbs will mordluts and work togathot

discuss aI}d legotiate necessrry cont aciu3l details to realize ths idenlilied
proiec,t(s).

Artlcle 4
AmandmBnt3
Amendments may be made in l'li! Agreemenl ai any time through
w'ill6n consent of the Patlies. Such amendments shall be ,nada in a {otm
sapsrate Protocols being ar inlegral pa( of this Agreement and shall enter ittto
h accordance with the provisiofis of Articla 8 ol lhis Agreemenl.

Article 5
ConSdontlel ity
This Agteem€nt and all information, which is sent and / or received by
pades within the ttamework of this Agreomer[ shall be kept skictly canfidential
musl not be disclosed to any lhird P€rty withoul priol wrilten consenl ol the
Pa.ty. This obligation of lhs Parlies shall remain in force for live (5) y.ars
termination of this AgreemeDl.
 Artlcle 6
Olspute Re3olution
All differences and disputEs between lhe parlies arising troit or coocerning
lh lhe application or interp,etation of tbis Agreement shalt be sefiled amicably
consultalions and / or negotialions betwacn the Competent Authorities.

Article 7
Other lnteanational Agrcements

Tha provisions ot lhis Agresment 3hall not afiad thc righls and obl8ations of
the Paaies rssulling from othat intsrnational agreernents to which lhe padies are
parties.

Articlo 8
Entry lnlo Fo.ce, Duration 3nd T6rmination
1. This Agreement sha:l enter into force on the dale ol the receipt ol the last
writlen nolificalion by \f,hich the Parties intom €ach other, th,ough d,plomatic
channeF, ol lhe compl€tion of llEir lntamrl legal procadurcs rsquirGd ior its ontry
into force.

2. This Agreement shal' remtin in force for a period or rive (5) years and sball
be automatically ,en ved for succe$ivs psriods ol tve (5) years, unless ons of th6
Parties nolifies the other in writing throu,gh diplomalic channels ol ib intention lo
terminate it at leasl lhr6e (3) monthr prior to the expktion ol lhe original or the
renewed period ol ive (5) years.
3. The terminalion of this Agr.emsnt 3iall nol .ltecl the activities and proFds
in progress or executed. unless tha Parlies agroe othe'wise.

Done at lslamabad, on 'id' of feb'rucr* 2017. n lwo origrnal copies, in the

Azerbaiian, and Engl,sh languages, bolh texis being squally authenlic.

on behelf ol lh6 Govomment of lehalt of lhe Govemmonl

On

the Re of Az3rbaijan of the lslamlc RePtblic of Pakblan

$
\,- \ .-
\\
Natg aq13v Shahid Kh&en AbbaEl
Ministar of Enargy ItiinlBier for Petroleum & Natural
ReaourceS
 l-
Arrne.t - lt

D
T

PAKISTAN LNG..
-l
L PLLIDG(LGs[20221 I t 125
25 Novcmbcr 2022

The Secraary,
Ministry of Energy (Pctrolc{rm Division),
Govemmcnt of Pakistsn, lslsrnabsd

Subject: Reouert for Approvrl - Frrmcworl. Aer€cm.nt betryeca pLL rtld SOCAR.

Dcar Sir,

We arc writing with Efer€ncc to tlr lntcr{ovcrnmcnr Agreqnanr bcnv€cn thc Govcr66col of prkistrn
and the Governmcnt of Azertaijan fm coopa'ation in thc ficld of Encrgy (rn ch€d rs ,Arncr-A,) wlich
includcs LNC and for which prkistan LNG Limircd (pLL) is a nominsrcd Goriry.

socAR has offcrcd LNc corgocs through a Framcwort Agrcemcnt und", thc Govfirmcor-tocovcmmcnr
srrangernenr to mcet natural gas roquircmats of thc country (anachcd hcrcwith !r ,Anoc*-B,)
salicnt
features of thc said Framcwork Agrocrnant art rs follows:

Tcrm lnitial onc (l) tcrrl cxlcndablc lo anothcr one (l)

Numbcr of I LNG csrgo pcr mooth, to bc oflbred by SOCAR 45 dayr pri6 to thc shn of
Crrgocr thc rclcwnt dclivcry window.
Each offcr for thc cargo will have a sct validiry Friod drrilg c,tid pLL may
the offcr.
Prlcc Formuh Pricc shdl bc ollcrcd in USD/lvlMBtu for cacb cargo, 45 dlys p.iq ro fic
rclcvant dclivery wiodow.
CrSo Qnrndty 3,200,000 MMBIU +/- 5%
Peymeot Tcrmr Within 30 days PLL's receipt of thc invoice
Crcdlt Support PLL to issuc Lcttcr ofCredit from local bank(s)
Port Cherycr Pon Chargcs for SOCAR cappcd el USD 500.000, whcrcrs 8ll PQA costs,
taxcs, shall be dcfined as Pon Chsrgcs
Dcmurngc Rrtc o csch Ofrcr will ircludc rhc applicablc Dcmunage Rrtc
Othcr Tcrmr PLL and SOCAR will sign a Confirmation Noticc, !r rhc tinc thc olfcr for any
cargo ir acccptcd by PLL.

Approval ofthe Fedcral GovcrDmcot is rEqu€stcd to cntcr into Frrmcwo ,lgcansrf

Kind rcgads,

ll".-$Of
Masood Nabi
M6n8ging Dircctor

Copy to:
. Directcatc Gcncral of Liquficd Gases, Minirtry of Enrrry, Petrolcum Division
. Dcputy Sccraary, Developmcnt Wing, Mitristry of Encrry, Pctolcum Division

9' Fbo.. Pet.oleom Houso. Atoturk Avenue. G5/2. lslomobod. Pokiston.. Ph: .92 51 921 6903 Fox: t 5L 92L 6904
www.pokkrg.com I inlo@poklng.com
 An". Llt-ltl

DRAFT

FRAMEWORK AGREEMXNT FOR THE SALE AND PURCTASE OF LNG CARGOES

RELATED TO

MASTER (DELIVER.ED EX.S}{IP) LNO SALE AND PURCHASE ACREEMENT BETWEEN

PAKISTAN LNG LIMITED AND SOCAR TRADING SA

BETWEEN

PAKISTAN LNG LIMITED

AND

SOCARTRADING SA

Dated ,2023
This Framework Agreement for the Sale and Purchase of LNG Cargoes (the .Framework
Agreement') is made on this _ day of.........,..2023

BETWEEN

socAR Trading SA, a company incorporated iD switzerland and having its registered ofiice at Rue
du Rhone 40, 1204 Geneva, Switzerland (the sseller"); and

Pakistan LNG Limited, a public limited compaay incorporated and existing under rhe l:ws of Islamic
republic of Pakistan and having its registered office at 96 floor, petroleum House, G-5/2, 214000,
Islamabad Pakistan (the'rBuyer").

In this Framework Agreement, sell$ and Buyer may individualty be referred to as a '.party" ard
collectively as the "Partles".

WHEREAS

(A) The State ofthe Republic ofAzerbaijan ("Azerbaijan") and the Islamic Republic of pakistan
("Pakistan") have entered into an 'Agreement on cooperation in the ficld of enerry' dated 2ge
February 2017 (the'G to G Agreement") pu$uant to whi ch they, inter alia, wish to effect the
supply and purchase ofcrude oil, peaoleum products and LNG betwecn their two countries to
reduce the energy deficiency in Pakistan (the "Project");

(B) Punuant to the G to G Agre€ment, the Buyer and the Seller have bcen nominated by their
resp€clive Covemments to implement the Project. The Buyer is a wholly owned subsidiary of
Govemment Holdings Private Limited ("GHPL"), and is a public sector entily incorporated
under the Pakistan Companies Ordinance 1984 and operates under the govemance of the
Ministry of Energy (Petroleum Division), Governnrent of Pakistan ("GOP"). The Seller is the
marketing arm of the State Oit Company of Azn rbaijan;

(C) Following the signing ofthis Framework Agreement, the Buyer and lhe Seller will enter into a
Master (Delivered Ex-Ship) LNG Sale and Purchase Agreement substantially similar to the
Mastcr (Delivered Ex-Ship) LNG Sale and Purchase Agreeme the Buyer and an afliliate of
thc Seller executed on 23 July 2018 (the "MSPA"); and

(D) The Seller and the Buyer now wish to agree the framework pursuant to which the Seller will be
offering LNG Cargoes to the Buyer.

NOW, THEREFORE, IT IS HEREBY AGREED as follows:

1, DEFINITIONS AND INTERPRETATION. REFERENCES TO THE MSPA

In this Framcwork Ageement, unless the context otherwisc rcquires, a capiulised word or phrase that
is not defined in this Framework Agreement has the same meaning as in the MSPA.

ln the case ofany inconsistency or conllict between this Franework Agreement and:he terms ofthc
MSPA, the terms of this Framework Agxeement sballprevail.

2. TERM

This Framework Ag'eement shall become effective on the date when it has been signed by the Parties
 and shall continue, unloss aerminated earlier in accordance with clause 17.2.1
of the MSpA (which
shall nuratis mrztandr3, to this Framework Ageement), unlil the Flrst aDdversary of the daio of
^?ply,
this Framework Agretment (Initial rerm). The &rm of this Framework Ageement shait
automatically
exterd at the end ofthe Initial renn for a fi[ther period of trrelve (i2) months (Extended rerm),
unless either Party gives written notice to the o&er parry, not later than one
(l) month before the eid
of the Initial rerm, terminating this Framework AgrcemEnt at the end of ahe lnirial rerm. Unless
terminated earlier in accordance wi:h this section 2 or clause 17.2.1 of the MSpA, the Framework
Agreement shall terminate automatically without notice at the end ofthe Extended rerm.

3. SCOPE

The Seller may, from time !o time, have certail qirantities of LNG available for sale and delivery to
Buycr and wish to offer to Buyer to purchase up to one (t) cargo per month derivered DES Discharge
Po* in Pakistan. The Seller may make such offer not later than 45 days prior to the start ofthe relevant
Delivery Window.

,1. VALIIITY OF OFI'ARS

Each offer made by the Seller prusuant to section 3 above (the "offer") will have a set validity period
during which the Buyer may accept Seller's Offer.

Although it is the intention ofth6 Parties to enter into Transactions during the term ofthis Framework
Agreement, the Parties agree that there shall be no binding commitment to sell and purchase a cargo of
LNG unless aad until a confirmation Notice und€r the MSpA has beer executed by both parties and
thereby a Transaction eotered into.

5. TRANSACTION Tf,RMS

The Parties agree that, in addition to the lerms set out in the MSPA, each Transaction shall contain the
following terms:

a) Contracl Pice: each Offer will contain a fixed Contact Price in USD/IvtMBTul

b) Source: any LNG supply area from the Seller's portfolio. The Seller's Facilities will be included in
:he Offer ard may be substitut€d by the Seller no later than 15 days prior to the start of the Delivsry
Window;

c\ Port Charges: The definition of Port Charges in the MSPA shall bs amsnded as follows: "Port
Charges" means the fees, imposts, levies, charge$ or port dues imposed on the LNG Ship in respect of
the LNG Ship entering, using or leaving the Discharge Porl or Receiving Facilities, including ha:bour
dues, tonnage dues, charges related to immigration and customs clea.rance for the LNG Ship and i*
crew, harbour master dues or any port haadling charges including costs of pilots and a.ll other escort
and/or suppoft vessels, all as established by a Comperent Authority or Penon having jurisdiction over
an LNG Ship at the Discharge Port.

Seller shall pay for Port Charges up to USD 500,000. Ary Port Charges b excess ofUSD 500,000 per
Cargo sbatl be paid by the Buyer.

d) Specifications: The LNG at the Delivery Poi:r: shall }ave a maximum temperarure of -158.5 "C,

The LNG delivered inlo lhe Receiving Facilities shall, when converted into gaseous state, comply with
the following Spec!fi cations:
 Ctry: 947.6 to I 145 Bn/scf. Oz: 0.2o/o max.

lVobbe Index: 1292 to 1435. H:S: 5.49 mg/mr (max).

Inert Gases: 4% Total Sulphu: 35 mgimr (max).

Hydrocarbon Dew Point: 4"C

m(.
COz: 2Yo msx.

e) Estimated Contact Quantity:3,200,000 MMbtu +/-5% in Seller's option;

f) Delivery Window'. each Offer will include the applicable Delivery Window;

g) LNG Canien Seller will nominate the LNG Carrier latest 2l days prior to the start ofthe applicable
Delivery Window, unless such LNG Carrier has not called the Discharge Port b€fore in which case
Selter sha[[ nominate such LNG Carrier latest 30 days prior to the start of the applicable Delivery
Window;

h) Paynent Terms: thirty (30) cslendar days following Buyer's receipt ofthe invoice;

i) Credit Support Documentary letter of credit to be issued by the Buyer for 105% of the estimated
Cargo value by the date specified in the relevant Offer and, where no date h8s been specified, latest l0
days prior to the stan ofthe Delivery Window. Lener ofCrcdit issuing bank(s) to be confirmed whether
acceptable by the Seller prior to such lrtter ofcredit being issued. All banking charges for issuing and
advising the Letter of Credit to be for Buyer's account. All banking charges for confirming the l.etter
of Credit to be for Seller's account;

j) Allowed laytine: 36 hours;

k) Demunage Rate: each Offer will include the applicable Demurrage R te expressed as a fixed amount
in US Dollars per day and pro rata for each part ofa day;

In the event ofany inconsistency or conllict betrveen any ofthe terms set out in this Section 5 and the
terms of the MSPA, the terms set out in this Section 5 shall prevail. In the event of any inconsistency
or conflict between any ofthe tcrms set out in lhis Section 5 and the terms ofthe executed Confirmation
Notice following the acceptance of an Offer, the terms of the executed Confirmation Notice shall
prevail.

6. GOVERNING LAW AI\D DISPUTE RESOLUTION

Clause l8 and Clause 19.6 ofthe MSPA shall apply, znraris murandis,to lhis Framework Agreement.

7. ENTIRE AGREEMENT

This Framework Agreement, together with the MSPA when executed, coDstitute the cntire agreement
between the Parties with respect to the subject matter thercof and supersedes any and all prior
communications understandings, arrangements or agreements betwecn the Parties, whether written,
oral, express or implied relating thereto. No amendment or modification to this Framework Agreement
shall be valid unless in writing and signed by duly authorised reprcsentatives ofeach ofthe Parties

8. COUNTERPARTS

This Framework Agreement may be signed in any number of identical counterparts, and by the Parties
on soparat€ counterparts, each ofwhich shall constitute an original, but which together shall consti:ute
one documenl. In addition, execution of this Iramework Agreement by either of the Parties may be
evidenced by way of a facsimile or electronic transmission ol such Party's signature (which signature
may be on a sepamte counterpart) and such faxed or electronic copy shall be deemed to constitute an
original counterpart of this Framework Agreement.

lN WITNESS whereofthe Parties have caused this Framework Agreement to be executed by their duly
authorised representatives on the day and year staled hereol.

For and on behalfof: For and on behalf of:

Prkistan LNG Limited SOCAR Ii ding SA

Signature: _ Signature:

Name: Name:

Tide: Tirle:
 An". (.t!- ll
BY FAX
//t r
MOST'MMEDIAIE

*',..ill*-- *'
The Manrglng Dlroclor. lslamabad, lho 11ttr 11sy6m[s1 2016
Pakisran LNG LimiteO
lpLUt. ,1,
\
lslamsbad.

l, tg( 0"
Fax N0,051.92i6904

Subiect.

Dear Sir,
I am directed to state that ECC in ils
moeting helcl on 3.t-10-2016 in Case No. ECC-
l21t21DA16has decided as under:.
t''ut,J?l
tL
rhe.Econonic coordrnolion conrmrilee or ths cabinor
considered tha sunmary data z6
seplember; 2016, subnilted by the Ministry oi
ieioin,ii'a-iiifi,t nttou,nt regaiding,tnport
of liguellodJVatural Gas (ttr/G) by pakistan LNG Llmltad (pLL), and ,pproied thi proiosat
contained in Pan.7 of lhe Summary'with folbwing modificationi: _

i. Secretary, Ministry of Pelroleum & Natural Resources wlll act as Chairman of price
negotiation Commi(ee instead of Chairman, Board of lnveslment. However, Chairman,
Board of lnvestrnent may be associated wisr the process as and when needed.

ii. Secretary, Ministry of Waler & Power will be included as a member in the price Nego$ation
Committee.

iii. Pakistan LNG Limiled (PLL) should also carry out negotiations wilh other LNG producing
countries subject to availabilily/ reliability ol lhek LNG supplies.

2. Para-7 of the summary is also reproduced as under for ease of reference: -

7. Being a capital intensive project of national importance and in line with the earlier
constituted Price Negoliation Committee 1eUb1 tor LNG supplies from ealar, MpNR
proposes thal a PNC may be constituted to negotiate the LNG Prices and other important

aspecls with PETRONAS of Malaysia and Gazprom of Russia al present. lt is further

proposed lhat the same PNC may also negoliate the LNG Prices and related issues in

luture LNG deals on G to G negotiation basis to be undertaken by pLL with companies like

ENGTE of France, ENI of ltaly, 0Tl of Oman, SOCAR of Azerbaiian and companies
nominated by any other counky. The Terms of Reference (TOR) lor price Negotiation

Commiilee are also attached for approval, The proposed PNC may consist of;

Cd-rq.-2r
l
{!
-2-

i Chakman B0l
ii Seuetary Finance Chahman
t Secretary p&NR Member
iv Managing Dhector, Member
SNGPL
Managing Director, Member
SSGCL
vi ruanaging Director, pSO Member
vii wlanaging Director, pLL Member
Member/Secrelary committee
J You are therefore, requested
to take further necessary
action accordingly,

(Dr.

CC: -
/, Deputy Director (LNG)
r) Director to the Minister for p&NR, lslamabad.
ii) SPS t0 lhe Secretary, p&NR, lslamabad.
iii) SPS to the AS (A&D), p&NR, tstanabad
iv) pLTL, tstanabad.
!IrL.SinS Direcror, 1y'/.
v) C00, PLL, lslamabad. J
ftrr1rr115

\ t
'
 TERMS OF REFERENCE

IMPORT OF LNG - PRICE NEGOTIATIOT.I COMM:TTEE

1. Purpose and Functlons

fhe LNG Priee Negotiation Committee (pNC) will perform the fo,owing
functlons:

l. Negotiate the LNG price formula payable for the LNG to be supplied on th8
basis of Government to Government (G to G) commlfnants.
ll. To negoliate bonch marking criterion, price rBvisw triggsrs, price review
mechanism snd payment mochanism. Review price Lronds in tho intgrnational
markel and tho region, comparison of LNG price with othet altsrnats fuals
availabte for supply and techBical suitability.
lll. To provide general guidance in connection with negotiation of the Sale and
Purchase Agbemgnt (SPA), and such other r€laled matters for which it may
be mandated lo the Committee by the GOp.
lV. The LNG Price Negotiatlon Commi[ee will also advise on ths following
matlers;
a. Provision of advicg and guidance regarding tho policy issue conceming
commercial terms of the SPA and its consistency wilh G to G
arrangements.
b. Poriod of SPA!/ contract.
c. ldentitication of lh6 prafoned pricing mechanism aftsr dua considerallon
of specific mschanisms proposed and finalizad.
d. Review of the drafr SPA and its submisslon to the competent torums for
ils approval.
e. Recommending requisite appaovals and consents and authorizations ttom
relevant authorities.

?. Fr€quency of meotings

The Committee shall megl on a regular basis as and when requirod.

Special meelings may be hsld at the requBst of any member of ths Commitleo.

3. LNG Consultants
 The committee wlll also be assisted by the LNG consultants b€ing
engaged for the purpose to assist and p.ovide professionEl support in general and
particularly wllh reference to benchmarking criterion, price ,ormula, price review
mechanism. price raview trigggrs. price k6nds in th6 intsrnational markst and region,
comparison of price with othel alternate tuBls etc. and technical sultabilily.
 Anrrcwf

t i,.'

PLUMO?nu22^ut3
PAKISTAN LNG. 13 Doccabcr 20Zl

Dircc'tcrtc Gcncrd dliqrrcficd Grcr

Miniry of Encrry (Pctrolarm Diviriou),
Govcrnmcnt of Prlisun, Llrm$rd.

Subjcd: R.o!. for Aporlvd - ktmciorl Arr!.lrcnt bclrc.! pLL lEd g)CAn-

D€rr Sir,

Thir ir with rrfcrrocc to yoor ldtcr dlacd t2 Dccembcr 2022.

As tcguircd, tbc signcd copy of&. minul.3 ofmccring ofthc pNC. rs approvcd by &o(libea ItrIC, ur
otbcbcd hcrclyiih IAru|Gr.A

Kird r!grr&,

$*,"*
Hced ofLNG Proorrtnrnt

9' Floq. Petphum ltouss. Ao(rl Avrru.. G-5/a hlornobod. Pokbror\ Ph "92 51921 6903 Fox .92 51 921 e904
wty\d.polltgr€o.n I hloepokhg;co.n
 Nll: o

Afdr:
o fnnrcrrrk Agracrrcru bcr:cn PLl. r:d SOCAR Trading rrr&r Cov:rurcnr*n{rorcnmcr
anlllgstnsfi
llcell!' tlrtc: 30 Notet*er 2022, 3 par
ilbdrcr:
Sr, |r'o Nmr Dalrnrttol / Orerdz
I Mr. llsro Yousefzri Additknrt Scoctry (Athri,l) I Aaing Sd!.at,
Parolasn
2. Mr. Sriid Qej Additiald S.cr.rsn (Folicy), Parol6rn Divirioo
l Dr. lmr.n Ulr& ,oid Sc.iariy. Fill.m Dividon
4 Mr- lrrra Ahrncd DC L'Gt
5 Mr. M.lood NrU
6. Mr. Ali tludld MD, SNGPI,
1 Mr,ln rr Mrdrr MD, SS(r
t. Mt- Sl'ad Mllhfilllrud Tdn MD, PSO
9 Mr. Arin Rlhr Kh.r CFO, PLL
t0. Mr. ,ihod n$l6d llcrd cf LNC lro(tlora. PLL
Iltxud$t:
I . Additisd Sccrary (Policy) iaidrtcd thc r..riag with rniry &.r Az.rb.[&'! rr.-omcd cGp.ny
hrl poporod r Frrmc$cl Agrc(5rcat Flrur,ll to 0E Gov.nrDld'i rngrgff|Gds *ith thc
Govcromcnt of Prtigrn.

L MO PLL ryFi.od ths PNC marbcr: rhrt duc to th. downSndc io coimtry'r crtdit dil!. puricipnion
io PLL'I spor Erdcn for procun trcrt of Lf,lG hrr bcao liorhod & fcrigr b.rb .rc ma tt dy !o
Foyidc co8nnrtim oo L.ttcr of Crcdit (l-C) lsrd by Prfi*loi rpnl(. Iloq,crci t*iL lbc doar of
thc Govcnar& $CAR hls iDdic.rcd ro roccp thc P.lirLni I&
hl} foporod r Fneest
ASn car u&r wti.h PLL yill bc rblc b q 'rdbrrcd E rba ntiaulity of tlr
a rEjcct tlE c..8oB
p.icc.

3. PLL's Hcad of LNC Procunrxnt p.!!cr{.d furrlrcr dctdb Ggr.ding dtc Fnnrrorl Agrcnr*
foposcd by SOCA& rcllii .'l putod $ li lo{s:
Tcrn hiti.l c (l) F.r lrrB, Grtlodlblc to:roab {. (t) F,
!{ombcr ol Crrlocr I LNG cargo pcr mrxrtb, to bc oflcrod by SOCA& 45 dryr piot o tlE
iut of the rclcyrfit delirtn' *'indou .

Each oflcr fq thc c&go nill hsw r r.i yllidily !(riod d'IirS yhicb PLL
m.y .cc.pa thc ollr.
fu* Fornuh Prkx fill
bc oflccd in USD.'l{MBtu fa crdt a4o. 45 dr}'r' Fh.lo
lh. r&an dclivrty wirdo*,
Crso Qurdty 3,2qr,000 MMBN +r 5%
rr),mc|lr TcrEr Witbio l0 &)s fo[o$.ing Pl :l: 's rcccipl olttr iamioc
CHlt Slrpport PLL to ir$x L,etlrr df Qldil 60r loc.l L.oq.)

frgE I of3

q^ &
 Po C'brr3c. Pm Chrgcr fc SOCAR epp.d rl USD 5(D,000, utrrar rtt PQA
co6lt, $lll bc da6rd u Pon
fttlc cact 0trcr will irxldc rhc Rtc
Ottcr Tcrmr Pl-1. ud SOCAR $ill riSn r C@funurion Nodcc, rr Olc timc thc olt(,
for PLL
4. ILL i,fcrncd rh.r . Mdcr Sal6 od Pur,cl|.l. Atrlcnc! (MSpA) q.cucd wirh SOCAR siidt
lur rnn'birdiog tcrr[s of uc oo&ar. wtilc r confrndan maicr",|t
rh.ll bc dgncd sirh xh crrgo
rcc.Fcd Frlrrrrat to thc otrcr ttr.& by SOCAR_

5. PLL rulo:tiod $d rllc ficc ollsr r![ll tc {$mitt.d !o pLL.t Bo.rd fc rppov:l of rllc ren+ vhilc
rn rulydr of cmprriron with ,n[td Ficc lhu bc 5lbminod fq coasidcraiqr A! 6c Ficc, fuX
bc tdid for Jhort Fiod of rirr {l6s &.,l 2{ hou,t),0E rfo.s it ir trrrdsil fh.t tbc
Ficr rc. rEa
rcjctdcr bc mdc rr PLL 8o.rd's lcvcl. pLL Bogd dro foltow rDc puice of rwuria3 rpu L}.lo
crryocr undcr 0r tadcr foocrs wtcrc vdidity ir ooly E bcm. Accadiody, to antc thc
Focqr
cllicicru. PLL's borrd bc autorizod to cvlluetc ttr picc rr urdl g .cct?.".r of cerjorr o rhc brj
&r.'nd. PLL funlE inf(DGd th. F riiptorr t t ir *ill io&on rtr nrilrblc itdivsy wturdorn in
rdvrncc fc f .'urir't puryrocr,
6, AAing So..,arfy Pcoolcum inquirod rbou tb. Fioc caryrriro ro bc m.dc rt &. tir ytrn Ficc ir
tocivld t@ SOCAR- PlI rrCrimd fur tu ollccd pricc rbrlt bc i, USD{r{MAo rdid cr! b.
cooprrod with tbc panilins ryoa Fics irdcr ,rp.n Kqr. tr{rrtrr (rX.M).
7. Additiorl So.rqrry t^doin) drcd rhd r e.chrrirE ir mry ro Gvrlurac fu Fio. d irr
cocryrrircr wirh rhc rnrrta Ficc to co.rrlc firt tt prioc otrcod ir hvcrblc.
8. On thc qurry nirod by Aainj Soqarry Ptrrclam, PLL ruboiud rbrL uoold t9 l,lovsab.r 2022.
SOCAR b.d iid:c.tGd lo ddir( cqo in mid of Dcocaibc 2C!2 widr ra idicrriw prht of
S3{t/MMBtu uAilc thc pcvriliaj IKM wrs u t2t5/f,{MBru
9. Acting Sccrury fccolcun, firrt r iaqdrld tbor rllc LC oofrrrrdo drugcr s thac rn
rubrtridly hi$ rod r,l qinE tddilc. PLL crpLincd Ott rh. co.rfii.q.tlrr ctr3c .r.tt bc bcuc by
PLl. $tid wiu bG rrd. Fn of rhc RLNG prie. PLL 6sth.r crpLiEd tbr GaE i, O. LC
mfrsuio duass rre barc by tbc nlgClcr. tE . will & n& pqt of lbc FiE3 o6!.!d b, th.
rupplia- Tlc picc cm*laod fcr rpprsnl $ill rbo in bd6 c66rD.ri@ ctrr8r., rldh 6.
rrrnganrart drc olfcn 0cribilityof diling of LCL A. F currtd praio+ If oo&anlfuo drgEr
s! p.n of 6. G.t8o Ffua Ac&g S.c'tfry Pclrolarm opird tbt t tC oofrraio ctrqn rc cr
anio cEa wbit rr snu rw*!, ritlcc itl r Gb-G t,rrDSEocoq SOCAI' Dtrt bc.r d r|ct
cofirardo clurgcr.
I 0. Ott<r PNC urcobcrr wtrc drc iovitcd fq cormrtr r$.€qucrrt to *ticb MD PSC! inquircd rr irdc

fc hingiag thL Frrmcvcl Agr!.!|.Dl d thit fcum rincc pic ir Da Frl of Oir rgsut
Additione! Sccaary (Policy) .od DS Lcr crphincd tlarcvic* lnd rppror/d ofai. dG, & Frcb.tc
rgrocrn(:u ir prn of fic TOR of thc PNC, noriticd b' thc ECC. 6ccf'cr rny rdcs ud purduc
rgrc"rsrt crccucd puBurnl to tr Fnnrsst Agrrcrnc'lt hlr to bc ipptovod by tbc PNC.
Accordingty, thc Fruncwrt Agrctnrnt udo thc Oowrnnra-o€o$Gro6t stufFs|. hs to b.
rr\icwcd ud tpprotld by thc PNC bcfcc nrhnit.idl to tbc Ect/Fcd.r.l Crtioa fc rpprovrt
Il.,oit SsGrrO FiD!G r8rr.d with thc prupcrl of rigirrg thc Fngruqt A8r@l ue rb.
Goy.rnrn r -to-Covcmruarr rgrccmc* rnd rug3crtcd to conri& rbc rdcvrnr rppovrL fioo ttc Sutc
B.nk of Pddstll\ if Grlui.ld.

Pqc2of!

h
 rtr c,.ronio'r?re6r of 6cli.cs oftiir( ro whict MD pl,l crptrincd rhn ric
12- MD PSo ir4uired o',
prics rlull be 6nlrr.rd rd cmprrod wirn rhc pntiling E rka
Fi& ,f.,.tcc. i; JrFn Kotcc
Mlrflr (JKM). MO PSO dro slu,td 6rt SOCAR n d rlso ottird r nrip of qfo. ,"a"
co\..,nrncflt'ro'oow'n !co!.n.ogmrd d...ing rut Frr, &c prrcc or rrr{cb w- rhtad-witb rKM.
PLL cn&ncd MD PSo'r oatcnar urd drrcd &.a socAr orl.rld llrc
Fcr of JKM + i0.r/MuBru
wtilc 0tc G.A!c. ur{.r rtrip ollcr wcrc biadiiog an fLL ro bs rccsir,ad_
13.,
UD.ISO rSrccd wi$ rlgdif tto fru!.ret egri.trnt r rr.rc rrc m.Jinrlrlrt oltigrrim or
comrdbrlcols urd.r lb. rtrcaaHtt.
l a. MD SSOC rgrood with iiadnt of &c ftu.{.,o.| Agrc11116ol .nd rlrtrd rh{ pioc rir[ tc tlr &iv.,
fq &m soc^& lhcrr{orc pLL mry bc ia r bco'prrcirim o rsscrr tlrpicai
c!18r0.! ro bc Fradtrrod
.3 it hrr ekcdy pocurud ceryoa 0o SOCAR radc &c:crdcr{3 pwr.
tr. MD SNCPL {rr.d tbrr e ncrir adcr ir inpodlal ta [,.m fr r{ply olSs/RL!,6 b lhc a6r*1
viilc fcw nrodb rrt los dcoud rcrb nii& rtorld bc rocourod frdnkprocrriry LNG,
16- Aaing socnrry Parcla, l.gl'{gr!ql thrr r picc diror.cry ,rd cvlrrxia,r D.dr.ni-r ir r:octsrry
lo bc d.vdAcd *hilc tln cct of lC srfrrrrtio. Brn dro bc cuil.rld !y pLL I 0r tir oa
rcccptrru of rhc crryc, PII mnrgxacor ntd dcrdop r cmpdrcuiw rnrlyir lo c.lE rrtdl
Iilrncid lrld crurxrgir, oblijltioc bcforc eoepola of rh. offcr F-,t by gAn"
Coxlodoo:
o Tbc PNC mcmbcrr tgE3d on.accutj6 of rhc fnnrrvo* Agtcoa. .
r lt wu ! tbdl fcmrrtcrc I rm&rairm
dccidod ibet Pt to wdulc rlr ,riic oficrod u rr{t rc L!
coofirndian drrg.. fraci crgo.

P.grl lat

B SX
 Ar.^f

MINUTES OF MEETING - PRICE MGOTIATION COMMTTTEE (PNC)

AgcDd8

Framcwork Agrwmcnt bctwccn PLL and SOCAR Trading undcr Govcmmsnt.to-Govcmmart

8rrangement- Delib€rstions on Pricc Evduation Mcchsnism
Mectlr8 Dr:e: I March 2023, 12.30 pm
AncDdrct:
Sr. No, Nsmt DedsErtlon / Ory$latlon
I Capt. (Rctd.) Muhsmmsd Mshmood Secrctary, Pctrolcum Division (Chairman PNC)
2 Mr. Zafsr Abb&s Additiorrl Sccrctrry, Powcr Division
3 ir{s. Sain Najccb Ahmod Joint Sccrctary (CF-II), Financc Division
4 Mr. Masood Nabi MD, PLL! (Senetery, PNC)
5 Mr. Amcr Tufsil MD, SNGPL
6. Mr. Sycd TEhs MD, PSO
7 Mr. Ghulam Moccn Butt GM. SSGC (on bchglfofMD SSGC)
E Mr. Rchan A-khtar CFO, CPPA (Power Division)
9 Mr. Ahmcd Rashecd Hcad ofLNG Procurcm€nt, PLL
Dlscurslou:
l. Scqrtrry, PeEolcum Division (Chainnan of thc PNC) strncd rhc mccting wi& coovcyirg
background of thc Framcwo* Agrcement offcred by Azerbaijan's SOCAR for supply of LNG undcr
the existing lotcr4overnment Agrccmcnl (lOA) between rhe two coutrtrics. Sccretary PaEolcum
informcd that thc Framcwort Agrremcnt is submitted to the Economic Coordination Commincc
(ECC) for approval, whilc price cvaluation merhonism is Io bc rcvicwcd rnd discuscd by thc
manbcrs ofthc PNC-

2. MD PLL cxplaincd that thc Framcwort Agrccmcnt is bcing cnvisagcd with SOCAR as intcrnationnl
suppliers are reluctanl lo participatc in PLL'S spot LNG tenders due !o downgrsd€d countsy's risk.
SOCAR has offcrcd 30 dsys crcdia pcriod undcr $c ssid agrcancot 8s opposd to thc stsndard 2l
days in PLL's tcnders. The price shsll be cvaluatcd in ahc samc manncr a8 it k evaluEted in csse of
the spot rendcrs i.c., comparisoo with thc intemstiond rpot pric:€ hdic€s.

3. PLL'3 Hcad of LNG Procurarcnt cxplsincd thc elrtic pricc cvaluation mcchanim for cvaluation of
SOCAR's offcrs, which wrs st$rd with PNC along wi$ th. mccling noticc. PLL also prlrattcd a
simulation for ollcrcd pricc comparisotr witb the actual JKWWIM bcochmartr. Tbc offercd priccs
shall bc comparcd with thc lowcsl of intcrnationrl spot pricc indicas slrch ss JaPan Korea Mstkct
(JKM) and West lndia Msrke, (WlM). The PNC membcrs acknowledgcd thc imponance of factors
such as comparisoo rvith thc allemativc fuels 8Dd imponance of import of LNO during I p8nicular
montlu
4. Additiooal Secrct8ry Powcr Division inquircd the rationalc bchind cboosing JKM or WIM and
inquired wbether thcsc arc relcva[t to Pakistad m3rtets. MD PLL explained that lbc most rclcvaot
spot pricc index is JKM as it reprsscnts Asian spot priccs. while Titlc TraNfcr fecility (TTF)
rcprcaents spol priccs for dclivcry to Eutopc. Morcovct, US bascd benehrnsrk Henry Hub reprcsenB
natual gas giccs, rvhilc Hcory Hub formula-bss€d Ll'lG is avsilsblc undfi lont-tcrm cootracts, whilc

Pagc I of2

s t-r}.J
'l

t,c dclivery ofsuch cargocs on spol basis srra, alvays bc priccd bascd
on thc spot pricc indiccs s'ch
as TTF or JKM' Additionsr sscrE ary power Divisio;
advi*ir ro revicw rhc yearry rads ordiffercnt
global spot pricc indices. sccaary pcrolcum
Division arso sharcd ,t ., nu.p" t o o"*tly picked up
its LNG impons whilc Jrpan has bccn one ofUc Urgot
impoi"rs.
5. MD PSO advised thrt tic a8e of otrering of rhe clrgo srd its price
by SOCAX mly be fixed, c.g.,
right Efur the price benchma:t has comprered ix 30 days period
so tbsr evaruatio, mecranism ,rJy
bc.ffxcd for all ftnre pricc otrcrs, It was aplaind tt SOCIi
*in of"r caryo bcforc 45 days o'f
delivery undcr thc Framc*ork Agrc.mcnl which pLL "i may lcccpr or rcjccq
;hilc any Oistresscd
cargo- mry also bc offercd by socAR rvith less lcsd time
duc ro-which rhc cvaruatiol mcchadsm
contains such scqarios"

6' MD SNGPL inqui:ed abour thc adjueun€nt to b€ mrde in &e anarysis of comparison
so is ro eqo"rc
price olfcrcd rirt rhe pubti$ed spot price b*chmark,. pd expraircd -rnn
thc.
tbe pricr anaiysis
under lhe cvaluation mc*hanisrn also incrudcs lhc computation of premiums with
rcspect 10 dcri;ery
of ING cargoes to Pski$a& such ar pon Charges, LC confinnation ctc. pLL rxplahcd ihal
sucl
prcmiums wcrc also compurcd by PLL's commercial corsultont wood Maclcnzic
in february 202r.
MD SNGPL suggcrtcd, snd all PNc mcmbers agrscd on rhc suggestion, that pLL shourd stipulate
and idcnti$ all such coBponat& whilc outdarcd figurcs 6hould not bc quotcd itr lbc pricc Gv8hrarion
i
mechanism' MD SNGPL firnhcr submined rhrl sNcpl shall aor bc in posirion to commmr otr rhe
reasonability of thc arices for lle cargocs otrered, as the same bas to be approvcd/eadorscd by &c
powcr scclor.

7. JS Finance inquired whethcr rhc bcncLmark of JKIWWIM havc bccn proposcd by SOCAI_ pLL
erpLircd thar socAR shall oflcr price ir rems ortMMBru. whilc JKlvl/wM strall bc uscd 0s spot
pricc indiccs to cvaluatc and comparc wirh thc olrercd prices. JS Fimlcc suggcstcd thc clafu of thc
mectirtg to include the inpr ofrelevart st leholders suct as pso and SNGpL in the decisioo matcing
proccss of thc PLL's Board, JS Finarcc fir&cr submi!&d thas sincc major coasumer of tllc LNG is
power scclor, therefore ils forEcastillg of the dcmand of LNG as well ss input for procurcmet of
additional LNG shall be ofstmost imponancg.

Concluslon:

The PNC mcmbcs agrecd on tio price cvahation mcchanism rnd advisd PLL to i&trtit the
i
componear ofpricc prendum for thc purpose ofcamparisoo with emrtiooal benchmarks.
Thc luul copy of tic appmved pricc cvaluation mcchanism is lnachcd bsrlwith is 'Ana-A'.

w
Capt. (Rdd.) Muhamrnad Mshmood

Scnetary (P.holeum Division) / Chairmsn, PNC

flila423
Pagc 2 of 2

e\ ,"a5
 Evsluetion Mechanlrm of SOCAR'r Offen Under G-to-G Arrsnqemeut

Thc mechanism to cvaluarc thc pricc offered by SocAR for each cargo, undcr thc Framework Agreement,
is as follows:

The following factors shall bc talsn into account whilc evaluating oe pricc offered by SocAR:
o Rcquirement and funporunce of import of LNG during &e r€lcvsol month;

o Pricc cornprison with rltcmativc fucls;

o Prcvailing LNG marta coditions and volurne availability; and

o Counuy's crcditnorthinoss and availability offoreign exchangc cover,

Price offered by SocAR in 3/lvlr,lBtu will bc comparcd with rhc prevailing spot pricc indiccs Japan
Korca Mar*cr (XM) as wcll 8s W6r Itrdia Marko (WIM) publislrcd by S&p plans.
The lowcst of the following pricc indicabrs stull bo idcntified and comparison slrall be made wirh the

offcred price:

o daily settlcd pricc ofJKlvl/t IM for the rclcvant delivery monrh;

o cumulative monthly avcragc for thc rclevEnt dcliyery month; and

o lowest available dtily spot pric€ index (whaher WIM or JKM).

In case 0rc offer from SOCAR is received aQer the pricing for relcvant dclivery month has bccn closcd

by S&P Plans" fien comparison oftlre offcred price shall be :isde with lowcst of&e:
o monthly seded avemgc ofJKItOMM for thc rclcvant delivcry month;

o daily scnled JKlvtrtMM of the pevailing delivery month; and

o Cumulative monthly avcrage for the prevailing d€livery month.

In casc the price offered by SOCAR is valid for multiple days, and the pricing for relcvant &livery
month is closed in the meantimc, thc ofercd pricc stull be comparcd with low6t of thc:

o the daily setled price of JKIIIWIM of cach &y during thc validity for the p:evailing dclivery

month;

o monthly settled averagc for th€ rclcvant delivcty monthi cnd

o daily scttlcd pricc as wcll Es cumulativc monthly aver8g,e for thc prcvailing dclivcry month;

PLL will record rcasons ifthe offered price is nol matching or comparable with the intcmational spol
prices.

PLL will also consider and computc the price prcmiums in relation to LNG cargo delivery to Plkislr&
such as Port Chargcs, LC Confirmation Charges, CrEdit Support and Psymcnt tcrms.

p)
 PLL will seek fecdback from SNGPL on rhe offered pricc. The feedback from sNGpL should explicitly

express the intent to whaher accept or decline the cargo at offcred price. Thc timcfiame provided to

SNGPL shall be in accordance with the validity ofthe offered price.

a PLL Board will decide to scc.fl or rcjcct SOCAR's offe(s) bascd oa the price comparison with
prevailing spot priccq liquidity position, and fccdback from the downsream stakeholders.

u-]
 Anr\erv-iii

SECRET
Item No.8

Case No.ECC-29 I O4l 2023

Dat;d: 25ri January, ZO23 SOCAR

DECtStON

The Economic Coordination Commitlee (ECC) of the Cabinet deferred consideration of the
summary dated 20th January, 2023 submitted by the Petroleum Division regarding '?pproval of
Framework Agreement between PIL and SOCAR" with direction to Petroleum Division to consult
Law and Justice Division
 A""c*-E
Govemment of Pakistan -1^r'
Ministry of Law and Justice
Law-ll Section
*++:f+t
F.No. I (353)/2022-Law-ll Islamabad, the l6th February. 2023

OFFICE MEMORANDUM

Subject: - APPROVAL OF FRAMEWORX A GREIIMEN'T B[,I-WI'EN PLL ANI)

SOCAR.
;.lq
The undersigned lias been directed to refer to the Petroleum Division's O.M No
LG-12(70)/2023, d,ated 14-02-2023 on the above noted and to convey that earlier comments by
this Ministry's letter of even number, dated 21.12.2022 (copy encloscd) are reiterated.
t

Encl: As above.
*--7
((Muh mad.{bbas)
on Officer
Mr. Muhammad Usman,
Assistanr Director (LNG-l),
Petroleum Division,
Islamabad.
 An'tcr."{,

Govcmmcnt ofPakistan
Ministry ofllrr and Jusricc
Lan'-II Scction
aiaata
F.No.l 1 3 53)/2022-Las.-ll Islunabad, the 2ld Dectmbcr,2022.

otrFtcD'tr.t8ItoRANt)t :1|

Subjcct: - PPROVA RK (; P
SOCAR.

The undersigncd hu bccn dircct.,,t lo ret'er {o the pctrolcum Division's O.M

No.LG- |X(701?022-PL, doled 13-12-10:: ur rbc subjcijr norcd abore and lo convcy rhar ttre
Summary for ECC pclains to (i) crccution otrl'ramework Agrccmcnt by pskisl.m LNO LiDircd (rLL.)
*ith SOCAR Trldio& rnd (b) ruthorizrtion to tic Berd of Oirrctors to lccap./Rjcct LN() crrgrxs bax
on ific iritability ofthc pricc.Thc comlnen$ ot'lhit Diviaior &r!, as follorvs:

(ii ll sppc rJ rhat Gowmmcn! of RcBrblic of ,\zcrbaijon ard rhq Oovcmmsnr sflrlrnric
ttcpublit ol Pdilnm cntc.rd hrto ar;rgrecnrnr on 18 Fcbruary 3gl7 (th!
"Agrccmcra), Pursualt to Articlc ? oi lhc r\grccnrcnt. lhc two govcmmrnts grccd
to coolxruc. among odrcn, in dcvclopot!$i of s[ppl.v trrdilg opponunirics ol'LNO
and supply of LNO in rclario[ lo po$€. projcsts rnd lo othcr consumcrs. Pursurnt to
tulicle X2) cf thc Agrsr$cnt, anlonB othc$, PIL lrorn ltalista:r side and Srrrc Oil
Comparrl' of Rcpublic of Azcr0lijlrt (S([AR), SOCAR 'l'rndirt lrrd ils
slbsidirdicr) hsvr b{a.r nomimtrd tbr |h( c\esrtior ol rhc projccrj. Accordingly.
tlrc frartt.\urk A8rcclll(r( irJ pn\xl:\cd in thc Sunlltlitry ApFars tO bt in liac rvith thc
Agrcern{lrl Subjcct to th( li,lkr\rl[i:

(il l hc drdli tr&rrworl Agrcemcnr i$ appqndrd to rlrc Sunrrrr;rry ap;xlrs ro

bc undcr a ltssacr Agr..ltlcnr drtrd ]1.07.:(,16 betrigcr PLL and
SOCAR Truling (UK) Lhnltcd rd Nould bc c\ccuted bst\r'cen PLL ,nd
SOCAR Ttadirtg SA. company incorltorltsd in Srvitzcrland, s,ttich has
bcco $acd to bc an afliliate of SOCAR 'Irading (UK) Lirnitcd. Pt.l. m8)r
bc requircr.l trr asccruirr snd it'nlirnr tlut $c Scller in lhc p.!,poscd
Frurwor\ ,\grc€mrm is S(x',\R I'ruding ondrnr its :ulsidiary ns
indicrtcd in Anicle l(2) of thc A8ncmr.ot.

(ii) The Foposed l'runc$ork A8rscmcrt his i[corporslcd ccnsin ptoviJiots

{such Ls dr'linitions and govenrirg ls\v rnd disPule r$olution) by
rcfcrcncc li!,rn thc \la'tcr,\grrcnlsrl. llrcrcfot, this Drtijion i) tlol rn
ptxillort to trlrrtnrcnt 0rr tlx tcrt \'lthu pro;Dscd lir.rmewotk Agreslncnt.

(b) Authoriz:rtion tlJ the &trld t'f Dirr:ctQs lir l.'.rpt rf'6rl LX( j c.rgoer .) n tlrc hrris of
suirrbilily of pficq. baing conrnr*ciallitriursirl nt.tttl:r docs not requirc ionnrcnt! of
this Division

iMuham ed Abbu)
Sc'ct Otiiccr

. Mr. Mllrmmrd Usmln.

,\ssissm Dirccror (LSC-l).
Pctrolcum Division.
lslemabad.
I
 A*, o^--I

MOSTIMMEDIA'IE
GOVEf,XMXNTOTTAXISTAN
FINAIiTC"DTW$OX
qxI"
f. No. 4(3oCf-v2009lpt 1562 telamrbsd lhc 23'6 D.ccrnbcr 2022

ornct vEMoRA!{DrrM
Subjeet: 4PEBqVAL or TRAMEWORT( ACREEMET{T BETWEEIY pLL ANp
SOCAR

Thc uadcnigncd is dircctod to (cfcr ro Pc*olcum l)ivision's OM No. LG-

I2QAWu2}-?LL darld l3r! Dcccob.r, 2922 ol rlrc aubjacr citcd-abovo ed ro 3r!& lh6! rhc
Finance Dhisioo supponr 0E proposal coohincd st pan-7 of drai summary and Pctrolcum
Division msy scsl vic$,! I concurcocc of Statc Bank of Palirtr:r (SlP) rvlilc placing s:rumary
for ECC ofdp Cabtet

(MEhrmnrd St!tlo)
S€cti6 Ofnccr (CF-Y)
Ph:920822t
Tlrc Sc*relrry,
i\.lio E,rergy (Pctroleun Divisiorr),
Govt r:unlrrl trf Pakistan,
lslrmrbra,

Copy to,

l. Govcmor, Stetc BrnL of Pakistao, Karachi" with llrc rcqucs to fumish it vicn8 I
commsntr on ingglil!-Cll&lgEgglt dircctly to Pc&olcum Divi:ioq undcr
htinrsrion to this Division.
ll. PS to AIS(CF),
,A Mr. Muhasrmad U:nun, ,'AAlstott Dircctor (LNG'I), Ditcotoratc Gcrcral of
Liquclicd Grsca, PcrotcurJ C-S2, lshurabsd"
$us+
 A.tn.rtfr

Govrmmatll of ?aust n
Mheyo, E *rav
(Power rM3bnl
aa1a.a

F. No. 10(a)/2021nPPs rrlamabad, the 23.d December,2022

OFT''f MEMORAII}UM
Subiect:

The u'lderslgned ir dlrected !o.eter to pet.oleum Division,, O.M. No. LG-

12l7ol/7a22'Pudated 13-12-2022 on the sublect dted above whereia the drafi summary on
the
subject was shared for views and comments.

2. Ihe rews of powe.0ivision gn thisummary are as under:

a. h pu.view olthe prevailing volafllity of interrrstional rn€rgy market, caupted wlth rapid
increasa i,r th€ &mrnd of elxtricity .3 wGll 13 .apid d€pl€tlon of local gaj rejerves to ,neet
inctemental en"ryy drm.nds. thc propo3ed arrangement of recuring the ILNG cirgo to. at lea!t
ooe (1) year is . toritive i.{tirtive to eniura the eoerty ilcurity ot the cou.lr.y (conaid€ring the
tad that no onlifir offer ht3 baen ruceivcd agalnit the reaent blds of p!! fo. p,ocu,ement ot
spot aargoi). Prorided furtrr, w€ unde8brd atrat the buyer shal haw rhe disa.etbn to €itkr
accepl o. rej€ct thc proposed offer (no later than 45 days balora lhe commenc?ment of detivery
rrrindowl, conslderin! th€ lmpacts on affordrbility. drmlnd and/or lmplicatio. o.l fo.elSn
exchanSe reservet.

b. Ih3 draft contract m.y include provirion to. resale of the cargo W the bqycr in rhe
intemational&lNG Stot m let followarg the Crnllrmation Notice unde, th€ Ma5ter LNG Sale and
Purcharr Afeement (MSPA).

c. ptl m.y be €quippcd with the ca'}3bility to optjmi:e the sgot ca.8o (uoder this
agrecmcntl wi$ th? othlr long-term cargos such a3 to mialm:zc the axpoture on cur.ent
acrounts of Palirtan.

d. IIle initlal tenu.c m.y b€ enend.d b€yond one (1) ye.r wltholt lmpo5ing ary liability on
both the panier to the MSPA
Ll -)K
,l"Ltu5t
(Muh:mm.d Aw.l3 N hmll
Serton Omce. (lPPsl
Ik Sacretary
Petroleum OMsion
lt tn lad

Coov ror lntormrtlon to:

i. SO to Secretary. Mifilstry ol loerfy {Powe. oivirion}, lslamabad

ii. SPS to Add,ta.*.| Ss.r8|tFll, Midnry of Energy (Powet Dlvlsion). lslamabad
iii. PS to ,oLt sacnt ty {PF}. Mtnirtry ot fnerBy (Power Dlvltlo.]. ltaamab.d

,
 Ar,tnc*-ffi

' GovernmcntofPaklstrn
Planning Commlsslon
Minlstry ofPlannln6 0ereloprnent & Speclal lnitiatives
(Energy Wing)
trrtra a

F.No.l2(108)Encrgy/PC/21!00 lslamabad,thc ZTtt l)acamltar,Z\ZZ

OFFICF MEMORANDUM

Sublect: ItrF

The undersigned is dircctctl ro rcfer to Mlnls:ry of Energl (Pctrolcum

oivision)'s 0.M. No.LG.l2(?0)/20ZZ.pp datcd t 3d, Dectnrbcr. 2022 on rhc aboye subicct anrl
to convey tl|lt lhis lvlinistry suppors Minisrry of Encrgy (pcrnrlcum Divislon)'s proposal at
Pata-7 of rhe dnli summary lor ECC please.

nil)
nl Chlef(EF&E)
Mr. Muhammad Usman,
Alsistant Darcclor (LNc-l),
Dlrcclorntc Gcnaral of Uquifieil Gaser,
Mintsry of tnergy (Pctrolcum Diuision) \
2aa Floor, Petroleum ltouse, &512, U
lslamabad
.-. &1nc'n, -Xlt

STATE BANKOF ?AKISTAN

TXCTI NCA?OLTCY DSPAR'Mf,NT
LL CHUNDRIGAN ROAD
t<AxAclII

No. EPD-lCM-40363+EPP 1(51)-D(p.2022

fanuary 13, 2023

vrhe Secretary,
Ministry of Energr,
Petroleum Division.
0overnment of Pahstan,
Pakisten Secretariat
lslemabrd.
(
Dear Sir,

.ApDroval ofFramework Agreement betw€€n pLL.nd SOaan

Please refer Finance Division letter No, a(30)CF.v/2009pr/552 dated Dece mber 23,2022
addressed to your oftce reladng to the above subiect ..

2. In this regar4 it is mentioned that in terms ofexisung foreign exchange ni8ulations drere

is no restriction on import ofLNG th.ough Leners olCredit (LC) or contraats throUgh a local bank
tn fact, EPD vide Circular Letter # 20 dated December 27, 2OZZ has advised ADs to prioritize
imports related to petroleum group which includes oil and gas.

3. We understand that the proposed transac{ons shall be executed as per exlsdng FE

regulations. Furdrer, the Governmentf PLL may explore the possibility of nego6ating better
payments tenns, may be 60 or 90 days instead ofexisting 30 days,

#
(Furqan Ahmed)
Depuv Dlrector

Copy for lnfnrrnatlon to:

- r{uhammad Muslim Sheildt" Settion Officer (CF-V-), C! Wing Filance Division, Government of
l_f,lastan, eal Secretariaq lslamabad
I
'_J
..
1
I

- .'i
i92-21.32{5396i UAN:lll-72?-tll Fa* +92-21