Qatar eyes long-term Pakistan LNG deal

Updated April 27, 2019

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Pakistan, with 208 million people, is running out of domestic gas and has turned to liquefied natural gas.
Pakistan, with 208 million people, is running out of domestic gas and has turned to liquefied natural gas.

ISLAMABAD: Qatar has emerged as the front-runner for a long-term gas supply deal to Pakistan, a senior government official said on Friday, with the cabinet of Prime Minister Imran Khan set to decide in the coming weeks on an agreement.

Pakistan, with 208 million people, is running out of domestic gas and has turned to liquefied natural gas (LNG) imports to alleviate chronic energy shortages that have hindered its economy and led to a decade of electricity blackouts.

Qatar is already Pakistan’s biggest gas supplier after signing a 15-year agreement to export up to 3.75m tonnes of LNG a year. That 2016 deal supplied Pakistan’s first LNG terminal. Emerging as one of the world’s fastest growing LNG markets, Pakistan is looking to secure a long-term supply contracts for its second LNG terminal, which can receive 600m cubic feet per day (mmcfd) of natural gas.

Pakistan has already signed a five-year import deal with commodity trader Gunvor and a 15-year agreement with Italy’s Eni, but is seeking long-term agreements for about 400 mmcfd.

Pakistan has been negotiating with eight countries with whom it has signed inter-governmental agreements in recent years, including Qatar, Russia, Turkey, Italy, Oman, Azerbaijan, Malaysia, and Indonesia. A Saudi Arabian delegation representing state-owned Saudi Aramco has also shown interest in a gas deal.

The senior Pakistani official told Reuters that state-run Qatargas put forward the lowest bid for a long-term LNG supply contract that would have a price review after five or 10 years.

Published in Dawn, April 27th, 2019