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Pakistan and Qatar edge closer to LNG supply deal

LNG Industry,

Pakistani and Qatari ministers will meet tomorrow at a joint committee meting in Doha to finalize an agreement on liquefied natural gas (LNG) prices and to negotiate further trade between the two countries.

Pakistan’s Petroluem and Natural Resources Minister Shahid Khaquan Abbasi will lead the Pakistani delegation in government-to-government talks over the price of importing LNG from Qatar to meet the country’s burgeoning energy demand. The delegation will inform the committee that Pakistan’s LNG terminal at Port Qasim, for which Engro Vopak Terminal Ltd recently won the contract for the construction and installation of regasification facilities, is due become operational in November this year, and the Qatari government has hinted that it will agree to first delivery of LNG by this period.

At present, Pakistan wishes to buy 200 million ft3/d of LNG. This figure is set to double by 2015 to 400 million ft3/d as the country aims to import two billion ft3/d over the next 30 months.


The most crucial topic of concern to be addressed at the meeting will be the price of imported LNG. During talks with Pakistan’s former PPP-led government, Doha had proposed a price equal to that of 14.7% of Brent crude oil at US$ 110 a barrel in the international market. This was reduced by 0.5% to US$ 17.437 per million Btu. An official from the government of Qatar said that the government had agreed to “further slash the price to finalize the contract”.

Heads of Agreement

The conclusion of a deal is now expected. Energy companies from both Qatar and Pakistan will sign a Heads of Agreement, which has been drafted by the Qatari government. The Heads of Agreement states that Qatar will supply LNG to Pakistan for a period of 15 years, with the option to expand this by five years, while cessation of the contract would result in a US$ 200 million penalty. According to the agreement, Qatargas and Pakistan State Oil will enter into an agreement for the supply of LNG.


Edited from various sources by Ted Monroe

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