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Qatar offers LNG at reduced rate

March 13, 2013

Advisor to the Prime Minister on Petroleum and Natural Resources Dr Asim Hussain.—File Photo

ISLAMABAD: In meetings held on the sidelines of the groundbreaking ceremony of Iran-Pakistan gas pipeline, Qatar offered to sell two million tons of liquefied natural gas to Pakistan annually at reduced rates and the offer letter has been received by the Ministry of Petroleum.

“Based on this offer letter we are forwarding a summary to the cabinet meeting tomorrow for consent,” Dr Asim Hussain, Adviser to the PM on Petroleum, said here on Tuesday.

Addressing a press briefing, Dr Hussain said the import from Qatar was different from the LNG plan on which the Supreme Court had issued a stay order.

This would be under an agreement between the two governments, he said, adding that the Qatari offer related to an unbundled project under which each segment of the import would be independent of each other and the Qatari government would be responsible only for the sale of LNG.

The transportation arrangements, handling in Pakistan and providing the gas to pipelines would be our responsibility,” the adviser said.

Earlier, the Qatari government had offered LNG at around $18 per mmbtu and an official of the petroleum ministry said the new rate was expected to be $4-5 lower.

Mr Hussain declined to comment when asked if Qatar had revised the price because of progress in the Iran pipeline project.

Two million tons of LNG is equivalent to 300 MMcfd and the ministry is planning to use part of an LPG terminal at Port Qasim in Karachi.

Replying to a question about possibility of US sanctions because of the Iran pipeline project, he said: “Iran is selling gas to Iraq, Afghanistan, Armenia and even Kuwait.

They are also selling oil to China and India and nobody is talking about sanctions there.”

He said the project would cost $1.35 billion.

“We are also going for the Turkmenistan-Afghanistan-Pakistan-India gas pipeline.”

He said the gas infrastructure development cess (GIDC) had been imposed to raise funds for the pipeline project and if collections were made fairly “we can meet our share in 2-3 years”. But, he added, it was unfortunate that large businesses were resisting the GIDC by obtaining stay from courts “which is unfair with the country”.

He said that apart from other pressures, the local authorities too were to blame for delays in such projects. “We have missed the boat several times in the past and one reason is that our bureaucracy is too slow to act in time while the other reason is that technical experts are not up to date at least in this sector.”

SSGC, SNGPL: Dr Hussain said his ministry was also forwarding a summary to the cabinet regarding unbundling of the SSCG and SNGPL.

“This is a very serious and challenging job and there is very strong resistance against it because even the officers are involved in gas theft,” he alleged.

Under the plan, the government will be responsible only for transmission of gas, and smaller, semi-autonomous companies will sell it to consumers in their areas.

The adviser said both the SSGC and SNGPL lacked a progressive vision, while Ogra lacked technical expertise to guide them.

“The gas lost from a pipeline after a terrorist attack is categorised as loss but this should have been insured and accounted for,” he said.