Pakistan to seek gas payment deal with Qatar

ISLAMABAD: Pakistan will seek a credit facility for liquefied natural gas payments from Qatar as part of efforts to ease its severe balance of payments crisis, the Tribune newspaper said on Tuesday, quoting Petroleum Minister Ghulam Sarwar Khan.

The paper quoted the minister as saying Prime Minister Imran Khan would seek a price cut on Pakistan's existing LNG deal with Qatar as well as a one-year credit facility, enabling it to defer payments for vital gas supplies.

Pakistan faces a severe strain on its balance of payments, with a current account deficit of around 5.9 percent of gross domestic product and foreign exchange reserves sufficient only to cover around two months' of import payments.

The government has been talking to the International Monetary Fund about a possible bailout and has stepped up efforts to raise funds from friendly Arab nations as well as China.

At the same time, Pakistan is facing a serious energy crisis with repeated blackouts and gas supply outages that led to the sacking of the heads of two of the country's main gas distribution utilities last week.

If agreed, an LNG credit facility with Qatar would follow similar agreements enabling deferred payments on oil supplies from Saudi Arabia and the United Arab Emirates, which have both agreed $3 billion facilities with Pakistan.

On Sunday, Saudi Energy Minister Khalid al-Falih announced plans for a $10 billion oil refinery in the port city of Gwadar, to be signed next month during a visit to Pakistan by Prince Mohammad bin Salman.

The Tribune also quoted the petroleum minister as saying the government was considering offering tax incentives to onshore  drilling to match similar incentives for offshore drilling under a new package of measures to be announced in March.