KARACHI: Pakistan has signed a new 10-year deal to import liquefied natural gas (LNG) from Qatar, a official said on Friday, with shipments starting in January 2022.
The deal struck with Qatar Petroleum will be for the supply of up to 3 million tonnes annually, with two cargoes a month initially, increasing to four a month in three years, the prime minister's special adviser on petroleum Nadeem Babar told a news conference.
He said the shipments under the deal will be 10.2% slope of Brent, which he said was more than 30% cheaper than contracts with Gunvor, from whom Pakistan had been receiving one cargo a month.
Prices are expressed as a "slope" against Brent crude oil prices, meaning a percentage of that price, and are typically a pointer for the opaque spot LNG market.
Babar said one agreement with Gunvor had expired in December last year while another would expire in about 14 months and that the Qatar supply would replace them.
He termed the agreement with Qatar the "lowest publicly disclosed contract in the world".
Before coming to power, Pakistani Prime Minister Imran Khan regularly criticised an "expensive" deal struck with Qatar by the previous government to buy 3.75 million tonnes of LNG annually for a 15-year period until 2030.
That deal is still in place.
Though it has several long-term purchase deals in place, Pakistan regularly taps the spot market to supply growing energy needs in the country.
The Khan government has been criticised recently in local media for its LNG purchasing strategy from the spot market.
LNG prices soared in the winter period, touching historic highs in January, but have since fallen sharply as warmer months approach.-Reuters
Reporter adds: Pursuant to the Cabinet’s approval of bilateral government-to-government agreement, augmenting cooperation in the energy sector between Pakistan and Qatar, Pakistan State Oil Company (PSO) has signed a long-term LNG sales and purchase agreement (SPA) with Qatar Petroleum.
The long term LNG sales and purchase agreement was negotiated, finalized and approved by the Federal Government wherein PSO is the nominated entity as per the aforementioned government-to-government agreement, PSO said in material information sent to Pakistan Stock Exchange on Friday.
Copyright Business Recorder, 2021