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Govt considering renegotiating LNG deal with Qatar: minister

Updated December 01, 2018

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Petroleum Minister Ghulam Sarwar Khan at a news conference.— DawnNewsTV/File
Petroleum Minister Ghulam Sarwar Khan at a news conference.— DawnNewsTV/File

ISLAMABAD: Building on its continuous criticism of liquefied natural gas import and processing terminals, the government on Friday said it was considering renegotiating the 15-year LNG import contract with Qatar.

The ruling Pakistan Tehreek-i-Insaf (PTI) has been criticising the contracts signed by the previous Pakistan Muslim League-Nawaz (PML-N) government for import of LNG from Qatar at a price equivalent to 13.39 per cent of international benchmark crude oil price and two terminals set up by the private sector for re-gasifying imported LNG.

“The price of LNG imported from Qatar is the most expensive,” said Petroleum Minister Ghulam Sarwar Khan at a news conference, adding that even the prices under proposed gas pipelines from Turkmenistan and Iran were cheaper.

Ruling PTI criticises contracts signed by PML-N government for importing LNG and setting up processing terminals

He said that his objection to the LNG agreement with Qatar was that why it was signed for 15 years when the mandate was only for five years. On top of that, he added, it also contained a clause putting a bar on non-disclosure of the agreement even three years after the expiry of the 15-year term.

Mr Khan said the government was looking into the agreement from both aspects [being expensive and non-disclosure]. Responding to a question, he said he would not speak about its specific terms because the issue could land in the International Court of Arbitration (ICA). “I am bound under the contract to keep its specifics secret,” otherwise they would involve the ICA, he said, adding that “an in-camera briefing will be given to Prime Minister Imran Khan in a few days” for a decision.

The minister said the petroleum division also had some reservations over the agreements on terminals and some of them were in courts and, therefore, he would opt not to prejudice the issue.

He said the Supreme Court, National Accountability Bureau (NAB) and Federal Investi­gation Agency (FIA) were looking into the contracts relating to import of LNG from Qatar and two LNG terminals in Karachi and those found responsible for signing the expensive deals would be held accountable.

The petroleum minister had last month announced sending three LNG contracts to NAB for investigation and renegotiating the contract with terminal operations to bring down processing charges.

The terminal operators said the agreement could not be reopened. NAB had been probing the LNG deals even when the PML-N was in power and comprehensively grilled various officials involved but never took it to the next level of filing a reference in a court.

Former prime minister Shahid Khaqan Abbasi has always defended the LNG import and processing terminal contracts as transparent and in best national interest and has been challenging the PTI ministers for an open debate.

The petroleum minister also announced at the news conference that all politically motivated board of directors of oil and gas companies would be reconstituted in the next 100 days to ensure transparency in the appointment of heads of these companies, adding that the government had already reconstituted boards of directors of six companies. He said the boards would also elect their own professional chairmen while chief executive officers would be appointed after clearance from NAB and the FIA.

Mr Khan claimed that the previous government had not auctioned a single block for oil and gas exploration during its five-year tenure, whereas the PTI government selected 40 blocks and auctioned 10 of them to exploration companies.

He said the federal government had written letters to the provinces, asking them to give the names of their representatives for boards of directors of oil and gas companies.

The minister said ExxonMobil would start offshore drilling 230 kilometres from Karachi in January next year for which a rig was on its way. OGDCL, PPL, ENI and ExxonMobil have 25pc shares each in this offshore block.

He said that work on two refineries in Balochistan was at an advanced stage. Parco was setting up a refinery and another one would be established by the UAE in Balochistan for which 2,000 acres of land had been allocated, he said, adding that the UAE crown price would soon visit Pakistan and sign an agreement in this regard.

Published in Dawn, December 1st, 2018

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