Qatar to provide Rs105 bn LNG for 15 years

Agreement signed

Gas will be sold to PSO on cheap rates; besides meeting 20pc gas requirement of country, 2,000MW electricity will also be produced; PM Nawaz meets Emir of Qatar; two countries also sign four other accords

DOHA: Pakistan and Qatar on Wednesday inked an historic agreement for the supply of around Rs105 billion (one billion dollars) of Liquefied Natural Gas (LNG) to Pakistan annually on a cheap price to help the country meet its energy shortfall.

The agreement on long-term LNG sale and purchase was signed on the first day of the visit of Prime Minister Nawaz Sharif to Qatar. He is on a two-day visit of the Gulf state. Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi and Chairman of the Qatar Gas Board of Directors Saad Sherida Al Kaabi signed the agreement on behalf of their respective sides at a ceremony at the Emir’s Palace.

The agreement has been concluded after hectic negotiations between the two countries for two years. Under theagreement, the price for each LNG cargo in a particular month has been agreed at 13.37 percent of Brent.

Qatargas, the Qatar Liquefied Gas Company Limited, will sell LNG to Pakistan State Oil Company Limited for a period of 15 years from 2016-2031. The annual contract quantity for 2016 has been agreed at prorates of 2.25 mt. The agreement also provides for annual upward and downward flexibilities up to three LNG cargoes per contract year. Downward flexibility can be accumulated for two contract years. The payment terms state that PSO will make payments 15 days after completion of unloading. The supply under the agreement would commence immediately.

The minister for petroleum later told The News that the LNG from Qatar was being purchased at the best available rates and will help start production of 2,000 megawatts of electricity from power houses that are currently not operational. He said under the agreement, Qatar will provide around one billion dollars worth of LNG annually to Pakistan that will meet 20 percent of the requirements of the country. He said the deal will help the country get out of its energy crisis and provide 35 million tons of LNG.

The two countries also signed three other agreements and Memoranda of Understanding (MoUs) for cooperation in the fields of radio, TV, health, and academic research and defence.

Prime Minister Nawaz Sharif held a meeting with Emir of Qatar Sheikh Tamim bin Hamad bin Khalifa Al Thani before the signing ceremony. The two countries also had bilateral talks on the delegation level. The prime minister and the Emir of Qatar also had a one-on-one meeting that continued for about 40 minutes. They discussed ways to enhance cooperation in different fields, including energy, trade, investment and defence. Both leaders exchanged views on regional and international issues of mutual interest.

In his remarks during the delegation-level talks, the prime minister said that Pakistan offers attractive incentives for foreign investment and Qatar Investment Authority should explore the potential in different sectors, particularly power generation projects and oil and gas sectors. He said Pakistan is a suitable country for investment and quantum of investment should be enhanced. He said that Pakistan and Qatar enjoy strong fraternal relations. Pakistan has huge manpower and Qatar could benefit by utilising the services of more Pakistanis. He said that trade and investment in all fields between the two countries must be increased.

The Emir of Qatar, on this occasion, thanked the prime minister for the visit and said that Qatar was a second home for the Pakistanis. He appreciated the role of Pakistanis in transforming and developing Qatar.

Earlier, on his arrival at the Doha airport, Prime Minister Nawaz was received by Prime Minister of Qatar Sheikh Abdullah Bin Nasser Bin Khalifa Al Thani and Muhammad bin Saleh Al Sada, Minister for Energy, along with other officials. He was given a red carpet welcome and two children presented bouquets to Nawaz. The official reception ceremony was held at the Emir Palace where national anthems of the two countries were played and Prime Minister Nawaz was presented a guard of honour on arrival. The two countries signed four Memoranda of Understanding (MoUs). The first MoU about cooperation between the two countries in radio and television was signed by Special Assistant to the PM on Foreign Affairs Syed Tariq Fatemi and Foreign Minister of Qatar Muhammad bin Abdurrehman Al Thani. The MoU on cooperation between the two countries in the health sector was signed by Finance Minister Ishaq Dar and Qatari Health Minister Hanan Muhammad Alkwari. While the MoU in Academic Research and Cooperation Activities between the two countries was signed by Pakistan Ambassador to Qatar Shahzad Ahmed and Commander of Strategic Studies in Qatar Armed Forces Staff Major General Saud Ali Al Naeemi. The main focus of the prime minister’s visit and interaction with the Qatari leadership is to enhance the bilateral relations in various fields, including energy cooperation, trade and investment, defence and increase in employment opportunities for the Pakistani workforce in Qatar.

The Emir of Qatar visited Pakistan in March and the return visit by Prime Minister Nawaz in a period of less than one year is a testimony of the growing relations between the two brotherly countries. Qatar hosts more than 115,000 Pakistanis, who have been contributing towards the development and prosperity of the country. Pakistan gives great importance to its ties with Qatar.