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Pakistan and Azerbaijan are moving closer to a major energy partnership, with discussions underway on a potential oil pipeline project and a $1 billion loan offer from Baku. Finance Minister Senator Muhammad Aurangzeb said the talks signal a shift toward stronger trade and investment cooperation between the two countries.
In an interview, Aurangzeb said bilateral relations have strengthened under the current government, supported by high-level engagements including Prime Minister Shehbaz Sharif’s visits and Pakistan’s participation in COP29 in Baku. He stressed that the focus has now moved from diplomacy to delivering tangible outcomes in trade and investment.
SOCAR Oil Pipeline Talks
Azerbaijan’s state oil company, SOCAR, is holding early stage discussions with Pakistan on an oil pipeline project. Aurangzeb expressed optimism that the project could become one of the first major joint ventures between the two sides, particularly in the energy sector where cooperation is expanding.
$1 Billion Loan and Investment Plans
Further boosting economic ties, Azerbaijan has offered a $1 billion loan to Pakistan. The financing could be structured through placements with the State Bank of Pakistan or by supporting Azerbaijani investors operating in the country. Aurangzeb added that Azerbaijan has also shown interest in investing up to $2 billion in Pakistan across key sectors.
Despite bilateral trade currently standing below $50 million, both countries are working to identify priority sectors such as oil, gas, energy and mining to make trade more meaningful. The finance minister said these efforts align with Pakistan’s broader strategy to diversify economic partnerships and attract long term investment.
