Pakistan asks Qatar to slash LNG price review period

ISLAMABAD: Pakistan didn’t seek reduction in the LNG prices with Qatari authorities during the recent visit of Prime Minister Imran Khan. However, it placed the request seeking an early review of LNG prices before 10 years as mandated in the existing agreement with Qatar.

The PTI government wants the prices to be reviewed after 5 or 7 year period and not after 10 years. More importantly Pakistan has also asked for additional import of LNG from Qatar during the summer season which will be in addition to the LNG being imported under the deal. The Federal Minister for Petroleum and Natural Resources Ghulam Sarwar Khan told this in a wide ranging exclusive interview with The News here on Monday.

The Pakistan's delegation headed by PM Imran Khan went to Qatar on a two day visit on January 21-22 not with the mindset of seeking any reduction in the LNG prices, theminister responded when asked if Qatar has refused to accommodate Pakistan on the issue. When stressed as to why the PTI government did not raise the issue of LNG's exorbitant price fixed at 13.37 percent of the average price of Brent oil futures for the preceding three months, the minister replied, the government wanted to further improve ties with Qatar. He said and in the past Imran Khan, Sheikh Rashid and he himself used to say that the LNG deal would be made public and tabled in the Parliament with the secret clauses, but now the government has taken a U turn in favour of the country by deciding against making the deal public. “However, NAB is on its toes and is vigorously probing into the LNG deal and awarding of the LNG terminal contract to a favorite company.”

Instead of price revision, Pakistan has asked the top mandarins in Qatar to change the price review clause with a period of 5 years instead of the existing 10 years. Moreover, the PTI government has asked for LNG import on deferred payment and to this effect, the top authorities in Qatar, the minister said, have assured that they will think and work out a separate mechanism for changing the price review clause but the Qatargas Company has 75 percent shares in it whereas the Exxon Mobil, Shell and other international companies also have shares in the company. “So authorities will have to take on board the international partners while amending the price review period and the LNG import on deferred payment,” the minister said.

To the Gwadar-Nawabshah LNG pipeline abandoned by the Nawaz government apparently on the pressure of US and an influential Middle East country as it was apprehended that the pipeline will be extended towards Iranian border and will be turned into IP gas line, the minister said the government has decided to revive the Gwadar-Nawabshah LNG pipeline and the petroleum division will discuss the issue in the ECC arguing that the LNG pipeline alone is being restored. As far as IP gas pipeline project is concerned, the minister said, on account of the sanctions reinforced by Trump administration, the government finds itself in difficulty to move the said project. However, the government is in touch with the Iranian authorities on how to advance on the project in the presence of the US sanctions.

About the inflated gas bills, the minister said the gas prices have been increased as the PML-N government had not done so inflicting a mammoth loss of Rs197 billion to the gas companies—Sui Northern and Sui Southern. The minister also said the Qatari authorities have also expressed interest to purchase the LNG based power plants of Haveli Badur Shah and Balluki. Apart from it, Qatar also wants the food security and to this effect it wants to make investment in Pakistan’s agriculture sector.