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Pakistan, Qatar likely to finalise LNG price

Islamabad: Pakistan and Qatar are likely to agree on a price for supply of liquefied natural gas (LNG) and finalise a deal in upcoming talks slated for February 18 in Doha.

In this regard, a Pakistan delegation, led by Petroleum and Natural Resources Minister Shahid Khaqan Abbasi, will participate in the Pak-Qatar joint ministerial meeting, sources say.

On the sidelines, energy companies of the two countries are expected to sign the Head of Agreement, which has been drafted by the Qatari government.

“Gas price will also be on the agenda. Pakistan has reviewed the Head of Agreement and the two sides will discuss it,” an official said.

Qatar has also suggested that it can revise the price downward for LNG export in a proposed government-to-government arrangement that will help ease energy shortages in Pakistan.

In the Head of Agreement, Qatar insists that the LNG supply contract should be for 15 years extendable for another five years with no “price reopener”. It calls for slapping a penalty of $200 million for terminating the agreement at any stage. Furthermore, the LNG price should be fixed as a percentage of Brent crude oil.

 “Now, the government of Qatar has agreed to further slash the price to finalise the contract,” the official said.

The board of directors of Sui Southern Gas Company has approved award of a contract to Engro Vopak Terminal Limited (EVTL) for setting up an LNG handling facility at its existing terminal at Port Qasim.

The case would be tabled before the Economic Coordination Committee (ECC) for formal approval of the contract, he said.

Earlier, Qatar had asked Pakistan to set up an LNG terminal before striking a supply deal. Now, as the terminal contract is going to be awarded, this will aid the upcoming talks.

On January 2, a delegation of Qatargas comprising Abdullah Ahmad Al Hussaini and Hamad Abdul Aziz Al Mahanadi held preliminary talks here with senior officials of the Ministry of Petroleum and Natural Resources, Inter-State Gas Systems, Sui Southern Gas Company and Pakistan State Oil.

Pakistan is eager to buy 200 million cubic feet of LNG per day (mmcfd), which will be re-gasified at the Port Qasim terminal and later injected into the system.

By 2015, the volume will be increased up to 400 mmcfd. The country is interested in importing two billion cubic feet per day in the next two-and-a-half years.

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