Pakistan, Qatar sign $1 billion annual LNG supply deal
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ISLAMABAD: Pakistan and Qatar signed a long term liquefied natural gas (LNG) supply agreement on Wednesday in Doha as a part of Prime Minister's two day visit to the Middle Eastern country.
The agreement was jointly signed by Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasiand and Chairman of Qatar Gas Board of Directors Saad Sherida Al-Kaabi at a ceremony in Diwan-e-Emiri in Doha, according to which the kingdom will provide a billion dollars’ worth of LNG to Pakistan annually.
Related: PSO allowed to sign $16bn LNG deal with Qatar
Qatar Liquefied Gas Company Limited will sell LNG from 2016 to year 2031 to Pakistan State Oil (PSO).
The annual contract quantity for 2016 has been agreed at a prorate of 2.25 metric tonne while the price for each cargo has been agreed at 13.37 per cent of Brent.
Abbasi later told media that the import price of LNG from Qatar was the best available rate, adding that Pakistan will get at least thirty-five million tonnes of LNG to help rid the energy crisis.
“The import of gas will also help start production of at least 2,000 megawatts of electricity from power houses that are currently non-operational,” said the minister.
The Economic Coordination Committee (ECC) on January 14 had allowed PSO to sign the LNG Sale Purchase Agreement (LSPA) with Qatargas to overcome the energy shortfall.
Prime Minister Nawaz Sharif is currently on two-day visit to the State of Qatar on the invitations of His Highness Sheikh Tamim bin Hamad bin Khalifa Al-Thani, the Emir of the State of Qatar, and His Excellency Sheikh Abdullah Bin Nasser Bin Khalifa Al-Thani.
Related: Resolving energy crisis by 2018 top priority, says Nawaz
A number of Memorandums of Understanding (MoUs) in the field of health, radio & television, education & research were also signed by both sides on the occasion.
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On DawnNews
Feb 10, 2016 08:12pm
Good news!! and tour of PM is successful now!!
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Feb 10, 2016 08:18pm
why is the Prime Minister going everywhere when he didn't go to Charsadda when our children in college were killed
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Feb 10, 2016 08:24pm
Buying LNG at higher price than the market price ... is not a deal!
Why didn't we sign a deal with Iran as its proposal was much more attractive with hardly any cost for transportation.
Clearly, I have doubts on this deal...
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Feb 10, 2016 08:29pm
At last! good work by the team.
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Feb 10, 2016 08:41pm
So bypass Iran, our next door neighbor to get gas from Qatar.We do not want to create harmony and peace in our neighborhood.
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Feb 10, 2016 08:41pm
Expect huge kickbacks in this deal. These people will make tons of money, that is for sure.
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Feb 10, 2016 08:46pm
I usually disagree with policies of PML N but in this case I am with him. Reason is that in 90's when Benazir Bhutto signed IPP, it was politicized and eventually idea was dropped. Later nation suffered drastic power shortage. Please keep remember as a nation we have only two options 1- Govt is doing work but with corruption 2- Govt is not doing anything but still doing corruption. So I think better choose first option.
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Feb 10, 2016 08:46pm
@syed abbas Come on dear. You should not Behave like this when the news is about a business deal that is important for the progress of Pakistan. But you can question if you find price of LNG is not suitable.
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Feb 10, 2016 08:54pm
Congratulation PM Nawaz Sharif.The people of Pakistan are looking forward to enjoy benefits and fruits of this deal.As regards prices we hope both Qatar & Pakistan could be in win win situation just link the price formula to Oil prices.
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Feb 10, 2016 08:56pm
this deal was necessary for PM to use this new mantra for next elections. its second time a deal in place with Qatar which was earlier not only cancelled, instead this Shahid Khaqan expressly made it clear the same will be imported from Australia. now, who knows this is just a mere eyewash paper work only.... ?.
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Feb 10, 2016 09:00pm
Great news for Pakistan. It will help in improving our economy. I hope it is just a first step. Second will be gas from Iran and Turkmenistan. Our impatient people are just good at criticizing. Our electronic media has created a strange atmosphere of confusion, hate and suspicion. So many people are simply incapable of thinking rationally.
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Feb 10, 2016 09:02pm
According to all analysts this is a bad deal and at higher price than world market. Higher probably because of high kick backs.
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Feb 10, 2016 09:27pm
@Karachitee " Reason is that in 90's when Benazir Bhutto signed IPP, it was politicized and eventually idea was dropped."
BB's IPP idea was not dropped rather agreements were signed at worst terms and expensive rates! These agreements were backed by the government guarantees, so there is no way out of these unfair agreements.
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Feb 10, 2016 09:34pm
Nawaz Sharif doesn't look like or act like a prime minister instead he is traveling all over the world even his presence is not necessary for so many occasions. Looks like he didn't had any trust on his team to sign LNG deal. There must be something in this deal for him personally. I hope soon NAB will open investigation to find out who benefited the most from this deals. Why this deal was not discussed in Senate and parliament.?
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Feb 10, 2016 09:40pm
Pakistan should focus more on solar energy ,like its been done here in India
It will be benficial in a longer run than any form of fossil fuel Energy
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Feb 10, 2016 09:48pm
So many negative comments here. Folks, I am not fan of PMLn but this is very good deal indeed. For price wise, it is very good price. Please please do your home work before you comment. All I can say with PPP 5 year tenure they could not make it but Khanqan did the good job to clear all the red tape hurdles. Well done bro.
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Feb 10, 2016 09:48pm
So in simple maths, how much is the price per MMBtu in USD for this contract? Average price of LNG is at $7.00/MMBtu.
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Feb 10, 2016 09:50pm
@Karachitee "Please keep remember as a nation we have only two options 1- Govt is doing work but with corruption 2- Govt is not doing anything but still doing corruption. So I think better choose first option."
How about the third and best option - Govt is doing work without any corruption. Are we this inept and corrupt to take this option off the table completely?
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Feb 10, 2016 09:54pm
Alhamdulilah, Congratulations to every Pakistani. Well done Janaab P.M. Regarding Charsadda his & our souls are with them but every where you know not possible
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Feb 10, 2016 09:55pm
@Goga Nalaik , Dear this is one of the best LNG deal I have seen so far. But it is not fixed , it will change as price of crude fluctuates.
Iran N.gas is lot more expensive but now they r ready 're-negotiate. Also, international financeing is still a question mark.
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Feb 10, 2016 10:07pm
Prime Minister Nawaz Sharif should be congratulated for this important LNG deal with Qatar. This long-term LNG deal along with TAPI / Iran oil-pipelines will greatly help overcome our energy shortfall. Other politicians should stop playing petty politics and appreciate government's (rare) good work for Pakistan's progress and prosperity.
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Feb 10, 2016 10:08pm
we would like to Appreciate it indeed this is a good social and economic development in the country ..
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Feb 10, 2016 10:50pm
@Goga Nalaik PPP made deal with Iran to purchase pipeline gas at $11/mmbtu where as LNG from Qatar will cost $4/mmbtu as per terms of this agreement at prevailing brent prices. We must appreciate the government when it deserves.
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Feb 10, 2016 10:52pm
Those asking questions of why this deal was not signed with Iran, well first of all, Iran has no intentions to see Pakistan progress. It is all well known that Iran/UAE are doing their best to jeopardise Gawadars development. I think the price paid to Qatar is high for the deal, but considering the environment, its is worth it. Imagine how much business we have lost with no electricity to our factories and businesses. Qatar is one country in the ME, which sees the economic advantage of doing business with Pakistan. I may be wrong, but this is my opinion and research.
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Feb 10, 2016 11:04pm
the price of 2.25 per m/tonne is not bad (given that it will for next 15 years) - its average price has been around 4 - 5 (max being 13.04) - so i would say - it is a reasonable price and not a cheat
regarding shipment price of 13% of brent price - i am not sure if this is right or not - may be someone with knowledge can give their input
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Feb 10, 2016 11:15pm
Great news for Pakistan and Qatar
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Feb 10, 2016 11:30pm
It is not a stitch in time when prices of fuels are falling with light-speed. And, agreeing in advance for 15 years, without a sigh for the sensibility!
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Feb 11, 2016 12:24am
Well done government. So much negativity on this forum, people who have no idea of the LNG pricing are making comments and those who don't know the Iran deal unit price are comparing the price. This is so insane
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Feb 11, 2016 12:32am
Excellent news. PM Nawaz Sharif has taken some very good decision. Having a good & long lasting relationship with Qatar is one such wise decision, Bravo!
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Feb 11, 2016 12:57am
suddenly everyone on this forum has shed their responsibilities from being security experts in favor to now their newly discovered talent of being petroleum marketing and pricing expert with special emphasis to our time tested beloved friend Iran who always has put us before their own interests as shown by last 20 years history. We are so blessed to have so many experts on as a matter of fact everything under the sun and new talent just keep on popping up on daily basis based on news debated by equally talented anchors and news readers.
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Feb 11, 2016 02:19am
Instead of kick-back the present government needs a kick in the back and shunted out, terrible it is very obvious that who is behind this deal.
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Feb 11, 2016 02:26am
@M.Saeed it is not a fixed price contract and the LNG price under this contract will change as price of crude fluctuates
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Feb 11, 2016 02:41am
Why not get cheaper from Iran, as the sanctions are lifted??
Corruption!
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Feb 11, 2016 02:56am
@Raj ,I agree solar energy is clean and the way to go,but Raj,there is money to be made.If our leaders made decisions based on whats best of our countries,India and Pakistan would be a lot further ahead.We seem to have some solar projects in the works and some are already up and running,but not nearly enough.
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Feb 11, 2016 03:13am
Sir, the USA has certified that Nawaz is more than hundred times better person to run the Pakistan. Accordingly the Pakistan is now on a big line to keep on growing economically. He is borrowing lot of money to get huge commission in the pockets of Nawaz and Shahbaz.
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Feb 11, 2016 09:10am
I do not have enough knowledge on the tpoic, but as per foriegn media articles in the economic section, it is a good deal gor Pakistsn's near future growth. Overall PM Nawaz has taken Pakistan on a fast pace of development and money is being spent where it is needed most for the future generations, i.e., infrastructure and energy. We lost several years to Musharaf and Zardari regimes, atleast we are back on track. Bravo!
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Feb 11, 2016 09:17am
@Raj Engery shortages - up to 8 hours brown outs: milk, vegetables, ice cream, beef, fish, some medicine, surgery, traffic lights, water pumps, list is too long,. And you talking experiment in solar, wind, etc but country can not wait : hydro projects, nuclear all are in pipeline but need 5-7 years: that's why these deals are being signed and implement NOW: eventually: Hydro, nuclear and coal will be back bone: solar n wind will be supplemental, slowly petroleum and gas will decrease slowly but surely.
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Feb 11, 2016 10:59am
If the contract for the yearly purchase of one billion dollars worth of LNG from Qatar binds the government, for the next fifteen years, to purchase or pay for a fixed quantity of LNG, at a price to be worked out on the basis of a pre-determined formula, then the contract at today’s price is worth $ 15 billion and definitely not $ 1 billion and a $ 15 billion contract would better describe the deal
Just the commission on the deal would be far in excess of one billion dollars.
Somehow, the most powerful sector which has embarked on an ambitious programme to eradicate corruption seems to be focused on, and pre-occupied with Sindh but seems to be least bothered over much bigger corruption scandals elsewhere in the country.
Karachi
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