DOHA: Pakistan and Qatar have signed a $16 billion liquefied natural gas (LNG) deal for 16 years.
Petroleum Minister Shahid Khaqan Abbasi and Qatargas Board of Directors Chairman Saad Sherida signed the agreement on behalf of their respective countries in Doha, while Prime Minister Nawaz Sharif and Emir of Qatar Sheikh Tamim bin Hamad bin Khalifa al Thani also witnessed the ceremony.
While talking to media after signing the deal, Abbasi said that the deal is a ‘game changer’ for Pakistan and it would see Qatar export 3.75 million tonnes of LNG to the energy-starved country. With the supply-demand gap in Pakistan standing at approximately 2-4 BCFD (billion cubic feet per day), the import would help meet 20 per cent of its energy needs.
“This agreement has been hailed around the world as the most cost effective deal for LNG globally under which Pakistan will keep importing fuel from Qatar till 2032.”
The minister claimed that the deal would save the country $1 billion annually while a further $600 million could be saved in diesel costs for power generators.
In July 2013, the Economic Coordination Committee (ECC) of the federal cabinet had authorised petroleum ministry to negotiate with Qatargas to import up to 500 mmcfd on delivered ex-ship (DES) basis. Subsequently, an agreement relating to energy sector cooperation was signed between the two governments. The ECC also allowed Pakistan State Oil (PSO) as buyer to execute the long term LNG sales purchase agreement (SPA) with Qatargas as seller, pursuant to a government-level agreement as per due process.
According to the agreement, the cost of gas for the month of March is estimated to be $4.78 per mmbtu, lower than the Qatar’s current rate of $5.35 mmbtu.
