Confusion over price of LNG from Qatar

ISLAMABAD: Confusion persists over the liquefied natural gas (LNG) deal with Qatar as the government has not yet disclosed the per MMBTU price of gas.

Earlier, it was expected that details of the agreement would be made public during the visit of Emir of Qatar Sheikh Tamim Bin Hamad Al-Thani that concluded on Tuesday. The agreement for import of LNG from Qatar was signed on March 13.

During the visit of the Emir of Qatar, many MoUs were signed in energy, trade, economic, investment, manpower and defence.

Under the $22 billion reported deal, Qatar agreed to supply 500 million cubic feet of LNG per day for 15 years. However, there was no official word on LNG deal and details about the rate of the purchase and sale price.

Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi stated recently that first shipment of LNG would reach Pakistan by the end of March. He also claimed that power generation cost through LNG would reduce by 40 per cent as compared to diesel.

When contacted, a senior official of the petroleum ministry said: “Some of the portion of the deal had been signed during the last Pakistan People’s Party (PPP) government by the then petroleum minister Dr Asim Hussain.”

About the price of LNG to be paid to Qatar, he said that due to recent decline in prices of petroleum products and its effect on other commodities, the price of LNG to be imported from Qatar has not been ascertained.

He was, however, of the view that it could be between $9 and $10, but its efficiency would be more than the furnace oil being used in power sector.

Actually the entire deal had already been signed; hence the details were not made public during the recent visit of Emir of Qatar, he maintained.

According to an official handout, the Qatari side expressed interest in enhancing the number of Pakistanis working in Qatar on development projects. Both the sides agreed to take measures to enhance trade and strengthen cooperation.

Pakistan and Qatar also signed agreements to further deepen cooperation in education, scientific research, media, culture, youth and sports. The agreements were signed following the delegation level talks between the two countries.

Published in Dawn March 25th , 2015

On a mobile phone? Get the Dawn Mobile App: Apple Store | Google Play

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Business

Rising crude oil imports boost exports

Reforms under way to privatise PIA

Banks meet ADR limit to avoid tax

Revolutionising reproductive health: Viya launches Viya Telehealth

On DawnNews

ڈان خصوصی رپورٹ: سانحہ اے پی ایس کو 10 برس مکمل مگر زخم آج بھی تازہ

‘اور زمین کا رنگ بدل گیا’، سقوط ڈھاکا کے متاثرین کی المناک یادداشتیں

موسمیاتی تبدیلی میں مصنوعی ذہانت کا مثبت اور منفی کردار

Dawn News English

Unpacking Pakistan’s Renewable Energy Boom

Packaging A Better Future: Tetra Pak’s Sustainability Journey

Dispatch From Washington: Why U.S. Increase Sanctions On Pakistan’s Missile System?

Trump says If US Govt Shutdown Happens, ‘Let It Begin Now’

What’s in the Tax Law Amendment Bill 2024?

Comments (14) Closed

Abu-Salmaan

Mar 25, 2015 09:51am

I have already pointed out about the deal, pl refer to my previous comments, the devil is in the detail and the details are not being made public, their is no mention of any competitive suppliers for comparing the rates etc., and therefore, it's being non- transparent is evident unless all the necessary details with financial implication in comparison to other available suppliers are made public, the possibility of vested interests cannot be eliminated under the circumstances.

Recommend 0

farooq

Mar 25, 2015 11:01am

Sounds fishy!

Recommend 0

AAN

Mar 25, 2015 12:11pm

Please see the statement of Mr. Abbasi that power generation cost through LNG would reduce by 40 per cent as compared to diesel! you are comparing the LNG with Diesel how we do not run any plants on diesel we only run the plants on either gas or furnace.

Recommend 0

Riaz

Mar 25, 2015 12:52pm

How could a deal be signed by PPP government in advance?

Recommend 0

Riaz

Mar 25, 2015 12:55pm

The concerned need to be taken to the court if the freight charges etc are higher than India which is at a longer distance.

Recommend 0

Musleh Uddin Ahmad

Mar 25, 2015 01:14pm

Possibly no other supplier was asked, hence no other bid. It is a deal initiated and concluded at personal level at the cost of national interest. As long as the government can borrow the money, no problem. If the common man suffer paying it back, why the government should worry.

Recommend 0

Farrukh Munir

Mar 25, 2015 02:40pm

Another fine mess!!!! When one buys so something, usually the price is the first part of the details unless you want to hide that information. We, the public will to pay for their incompetence, and we will find out later that we are paying a far higher price than everyone else in the world.

Recommend 0

woody

Mar 25, 2015 05:51pm

So your either buying LNG without knowing the price - or won't disclose the price - or are still in the process of negotiating the purchase. All the secrecy/drama seems to imply incompetence, corruption and/or outright lying. Buying LNG isn't all that complicated so long as you have money and aren't demanding bribes from the seller.

Recommend 0

Pmahmud

Mar 25, 2015 07:06pm

It is obvious that it is govt to govt deal and it may include LNG for services to be provided. To clarify the situation could somebody provide current market price of LNG. I don't think that there is any such thing.

Recommend 0

Brig (R) Waheed uz Zaman Tariq

Mar 25, 2015 07:12pm

Such deals have many hidden details. No one knows about the exact price. Usually, terms and conditions are made very tough. Money changes many pockets and accounts. Rulers are benefittd and the public is engaged in the visious cycle of circulr debt.

Recommend 0

Altaf, London

Mar 25, 2015 07:49pm

It's yet another evidence of middle-men taking their cuts along the chain! Hence no one is willing to owe up on what the actual costs are. Price of LNG on the world market has declined considerably over the last few months and even the Japanese & Koreans are not paying more than US$10 -12/ MBTU these days. Pakistan is fraction of the distance to those buyers, so why is it paying almost the same price? Furthermore, LNG is a buyrs' market these days and even the long-term contracts are being re-negotiated and the customers are going for spot-market cargos. Under these market conditions, why is Pakistan agreeing to a long-term supply contract? Incompetence & corruption is driving this country into poverty.

Recommend 0

M.Saeed

Mar 25, 2015 08:22pm

Why the LNG-container-ships of latest designs that are 40% cheaper not being employed ? Why the costing of LNG not based upon the latest downward trend still in deep dive?

Recommend 0

M.Saeed

Mar 25, 2015 08:32pm

Nigeria is a country that holds one of the world's largest Natural Gas Reserves and desperately looking for prospective buyers. Why not try to explore them for a fairly competitive rates?

Recommend 0

Nizamuddin Ahmad Aali

Mar 25, 2015 10:05pm

In western and other successful democracies the business is done differently than Pakistan. Wih the exception of licensed item procurement, every bid is published and becomes a public record. The price and the supply company names is published in government publication immediately after the bid is approved. The other bidders have a given time to appeal . After the dead line the bid is final. Why the Pakistani government is exempted from the same practice.

Recommend 0

Read more