PM to visit Qatar for new LNG supply deal

ISLAMABAD: Prime Minister Shehbaz Sharif is expected to visit Doha, Qatar on Wednesday (tomorrow) to hold consultations on a new LNG deal amid the soaring energy crisis.

During the visit, the prime minister will hold talks with the Qatari leadership. He will also discuss a new LNG deal with Qatar and seek relief in the current supply as global prices rise.

Pakistan is seeking more gas imports on deferred payments from Qatar amid a severe energy crisis and expensive fuel imports.  LNG has become a rare commodity in the international market in the wake of a gas crisis in Europe amid the Ukrainian war.

Pakistan is facing a shortage of four to five cargoes (about 400-500 million cubic feet of gas per day) every month. The government has failed in last three attempts over the past couple of weeks to secure even a single cargo for July from the spot market.

In February 2021. the PTI government signed a deal at 10.2 percent of Brent operational on January 1, 2022. The PML-N government had signed the 15-year-long deal at the price of 13.37 percent of Brent.

These contracts are not enough to cater to the energy needs as Pakistan has to issue tenders seeking procurement of at least four spot LNG cargoes every month.

According to reports, Pakistan will not be able to get two LNG term cargoes from Qatar in August under the second agreement at a price of 10.2 percent of Brent.

The non-availability of two LNG term cargoes will aggravate the situation in August. The government has also issued tenders seeking five LNG cargoes from the spot market despite being available at the highest ever cost of $39.8 per mmBtu.

Pakistan LNG Limited (PLL) issued tenders three times but it did not get any bid in the first two attempts, and eventually got only one bid at a price of $39.8 per MMBTU. The government decided not to purchase the cargo at the hefty price.

Federal Minister for Planning and Development Ahsan Iqbal has said that gas price has gone up in the international market but Qatar offered low price gas to Pakistan.

The prime minister is going to Qatar for more LNG supply contracts and may also seek some relief in the provision of more LNG cargoes under the deferred payment mechanism.

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