Daily Times

DOHA: Pakistan and Qatar on Wednesday inked a $16 billion Liquefied Natural Gas (LNG) deal that would enable the energy-starved country to import natural gas for 16 years and to meet its energy requirements.

The signing ceremony of the LNG sale and purchase deal was held here between Ministry of Petroleum and Natural Resources of Pakistan and Qatar Petroleum. The agreement was signed by Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi and Qatargas Board of Director Chairman Saad Sharida. Prime Minister Nawaz Sharif and Qatar’s Amir Sheikh Tamim bin Hamad bin Khalifa Al-Thani also witnessed the signing ceremony. Pakistan is facing a severe shortage of natural gas, both for its electricity generation and industrial use.

The supply-demand gap stands at approximately 2bcfd. The government has signed the import deal to minimise the gap, official sources at Ministry of Petroleum and Natural Resources said. Talking to media at the signing ceremony, Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi said the LNG deal with Qatar, which was the biggest gas producer in the world, was a game changer for Pakistan. He said under the agreement 3.75 million of tonnes of LNG would be imported annually from Qatar on government-to-government basis on comparative rates, adding that it would meet less than 20 percent energy requirements of Pakistan.

He said the deal would help improve performance of closed 2,000MW generation units and three fertiliser plants besides mitigating sufferings of domestic consumers and CNG sector. The minister said it would save the country one billion dollars annually, besides $600 million would be saved under the head of diesel cost. He expressed the hope that the present government during its tenure would steer the country out of the energy crisis. The ECC in July 2013 authorised the Petroleum Ministry to negotiate with Qatargas on government-to-government basis for import of up to 500mmcfd of LNG on DES basis.

Subsequently, the Petroleum Ministry nominated PSO and Qatar nominated Qatargas to negotiate the SPA. The ECC, in August 2014, constituted LNG Price Negotiation Committee (PNC) comprising Petroleum secretary (Chairman), representatives of Finance Division, Water and Power and BOI. Managing Directors SNGPL, SSGCL, PSO and ISGSL (committee secretary) were made part of the committee. The PNC held a series of meetings with Qatargas and finalised the price and key commercial terms of the SPA.