Pakistan and Qatar have succeeded in evolving a consensus to address all outstanding issues regarding the development of LNG terminals and finalise the investment decision by the end of this month.
The understanding was reached during a videoconference between Minister for Maritime Affairs Syed Ali Haider Zaidi and Qatar’s Minister of State for Energy Affairs Saad Sherida Al-Kaabi on Tuesday.
Minister Al-Kaabi, who is also the President and CEO of QatarEnergy, said QatarEnergy fully supports and will be a shareholder in one of the private sector LNG Terminals being set up at Port Qasim. The Qatar’s minister of state will visit Pakistan at the signing of the implementation agreement.
It is pertinent to mention here that the Competition Commission of Pakistan (CCP) cleared state-run Qatar Energy’s bid in November last year to acquire 49 per cent stakes in an upcoming private sector LNG terminal, paving the way for Qatar’s first direct investment in Pakistan’s energy market.
“The proposed transaction is hereby authorised,” said the country’s competition regulator in an order issued here saying the proposed transaction did not meet the presumption of dominance in the market because the target entity’s — Energas Terminal — share in the market would be no more than 33 percent.
Energas, a merchant terminal yet to come on ground, is currently owned by three local business groups — Lucky, Sapphire and Halmore. Qasim Terminal Holding LLC (QTHL) is a subsidiary of Qatar Energy formerly known as Qatar Petroleum which has two long-term LNG supply contracts with state-run Pakistan State Oil (PSO).
The Qatari firm had filed a pre-merger application before the CCP for proposed acquisition of 49pc shareholding of Energas under section 11 of the Competition Act 2010 read with regulation 6 of Competition (Merger Control) Regulations 2016.
The CCP said it examined the documentation, the market situation and conducted an independent research of the terminal market that the ultimate acquirer – Qatar Energy – had business related to exploration, production and sale of crude oil, natural gas and gas liquids and refined products, fertiliser, investments in its local market and board including in bunkering and underwriting insurances and had entered into a subscription agreement with Energas for over Rs757 million to take over 49pc shareholding.
It noted that there were overlaps between the merger entities but the acquisition would create a synergy for efficient development of the LNG sector in Pakistan. Energas is one of the two parties currently engaged with Pakistan government and its entities for development of additional LNG terminals on “merchant model” as against existing two terminals set up under government guarantees and processing fees.
Qatar is the largest producer and exporter of LNG and has been increasing its production and making further inroads in LNG export markets in recent months.