According to the latest Reuters report, Pakistan is at risk of losing foreign investment in its LNG industry as it contemplates the renegotiation of two LNG terminal contracts.
One of these terminals, built by Engro Corp., has sparked the controversy as the new government of Pakistan, led by Prime Minister Imran Khan, views it as too costly. The current solution on the table is the renegotiation of the two contracts.
The Engro terminal was built as part of a vast LNG infrastructure initiative, introduced by Shahid Khawan Abbasi (the former premier who stepped down from his post after a 9-month stint in May), which aimed to ease the energy shortages that have plagued the country for almost a decade. The other terminal in question was constructed by Pakistan’s Associated Group and energy trading firm Trafigura.
Renegotiation is considered a controversial move by many experts, amid fears that it will deter big names, such as Exxon Mobil, from investing. Former premier Abbasi told Reuters, “It will scare off foreign investors. It’s stupidity… This is not a joke, this is not some small company, this is Engro, the number one corporation in Pakistan.”
According to Reuters, Engro’s current stance is that it is under no obligation to renegotiate, despite the new Petroleum Minister, Ghulam Sarwar Khan, claiming that the terminal rewards the company with overly generous returns.
An investigation into the issue and former-premier Abbasi is reportedly being carried out by Pakistan’s anti-corruption agency, however no details have been released since it was announced in June.
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/14112018/pakistan-threatens-to-re-open-lng-deals/