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Pak-Qatar deal: Import of 200mmcfd LNG through Engro’s ETPL terminal in doldrums

Pak-Qatar deal: Import of 200mmcfd LNG through Engro’s ETPL terminal in doldrums

ISLAMABAD: Pakistan may not be able to get the 200 mmcfd LNG supply from Qatar with price re-opener clause for short period of just 2 years as the vibes coming from Qatar suggest that Doha is inclined to longer period deal with no condition of any price re-opener clause.

The Nawaz government has multiplied its efforts to go for a sustainable LNG supply deal with Qatar under government to government arrangement, as LNG terminal is going to be completed by Engro’s ETPL at Port Qasim by January 26 despite the fact that LNG terminal is supposed to be completed by March 31, 2015 under the contract with the government.

However, the decision is going to be finalised in the Pak-Qatar talks that are going to kick start today (Monday) in Islamabad, a senior official at Ministry of Petroleum and Natural resources said.

Pakistan will also start LNG talks with functionaries of PETRONAS—state owned company of Malaysia on November 16. This means the Nawaz government is exploring all avenues for sustainable supply of LNG under government to government arrangement.

The officials of Qatar gas company, Pakistan State Oil (PSO), Sui Southern and Ministry of Petroleum and Natural Resources will lock their horns at working group level meeting and decide whether the quantum of the LNG to be imported for short or long period with price re-opener clause or not.

Federal Minister for Petroleum and Natural Resources, Shahid Khaqan Abbasi, said that Qatar had so far inked the LNG supply agreements for 15 years period and extended two of them for five years. The minister said that Pakistan would get benefit if it goes for longer period agreement as under this scenario, the price of LNG would be reasonable and affordable.

About the price re-opener clause that Pakistanis’ experts want to make the part of the LNG supply deal, the minister reckoned with saying he is personally not in favour of the price re-opener clause arguing that if the LNG prices surge in the international market then this clause may prove lethal for Pakistan.

When his attention was drawn towards the recommendation of the consultant that Pakistan should import LNG from Qatar for shorter period of time at least for 2 years with re-opener clause keeping in view the further decline of LNG prices in the market, the minister said that it would be decided in the working group level talks begin today in Islamabad.

“We are also going to import LNG through tendering for which international competitive bidding will be held,” the minister said. He admitted that ministry has also proposed amendment in PPRA rules for spot purchasing of LNG. The minister said that India has permitted its state owned company in Singapore for spot purchasing of LNG below $15 per MMBTU.

He said that the government of Pakistan would import LNG of 400 mmcfd through the Engro’s ETPL LNG terminal and 400 mmcfd through the second LNG terminal for which the bids have been sought.

To a question, he said that Engro’s ETPL would participate in the bidding process, but the site of the second terminal will be new one so that level playing field could be ensured to other parties. Another LNG terminal at Gwadar with pipeline of 711 km to Nawabshah is being installed with the help of China under government to government arrangement.

In addition three terminals are being installed by private sector out of which Bahria Foundation is going to install single mooring LNG import facility. To a question, the minister said that government was not inclined to import LNG through Engro’s terminal before March 31, 2015 as if the government opts to import LNG from February 1, then it will have to change the LNG supply agreement (LSA) with Engro which will create a new controversy.

So the government has decided to import LNG as per the agreement after March 31, 2015. He said that if the LNG terminal was opertionalised before March 31 then the CNG sector may import LNG prior to the government.