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Expensive LNG: Pakistan to pay additional USD 2.5 billion to Qatar

HH sb,

13.37$/MMBtu the most expensive LNG in the whole world..

Please dont distort things. The contract is 13.37% of Brent, the price is not $13.37/MMBTU. Price is lot less. Some of the lower prices quoted here have been entered into when oil prices were lower and outlook was gloomier. Stop abusing MNS for no rhyme or reason.

Regards

I agree that the person above has quoted wrong price ... but you are also not quoting it correct ... here the comparison is not usd price vs usd ... but comparison is quotation of eni vs qatar ... if news is correct then obviously eni rate is cheaper ... differnece of 1% in the rate means qatar is almost 9% more expensive ...

So bashing NS is right here ...
 
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1) 13.37$/MMBtu the most expensive LNG in the whole world..A shady deal from the beginning without vetting process and only qatar was contacted directly...Surely Saif-ur-Rehman did well for himself and NZ.

HH sb,

13.37$/MMBtu the most expensive LNG in the whole world..

Please dont distort things. The contract is 13.37% of Brent, the price is not $13.37/MMBTU. Price is lot less. Some of the lower prices quoted here have been entered into when oil prices were lower and outlook was gloomier. Stop abusing MNS for no rhyme or reason.

Regards

Are both of you two blind ?

Article says 13.37% of brent crude price which as per NY commodity index closing price of brent crude comes to around 7.56 USD / mmBtu.

It's not USD 13.37/mmBtu.

Nevertheless, it's almost double that of natural gas price on NYMEX which is only USD 3.063/ mmBtu.

http://www.nasdaq.com/markets/natural-gas.aspx

You guys must be pretty rich and blatant to work out such a deal :lol:
 
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Are both of you two blind ?

Article says 13.37% of brent crude price which as per NY commodity index closing price of brent crude comes to around 7.56 USD / mmBtu.

It's not USD 13.37/mmBtu.

Nevertheless, it's almost double that of natural gas price on NYMEX which is only USD 3.063/ mmBtu.

http://www.nasdaq.com/markets/natural-gas.aspx

You guys must be pretty rich and blatant to work out such a deal :lol:

NYMEX is a domestic gas rate, LNG is expensive commodity..........

1) 13.37$/MMBtu the most expensive LNG in the whole world..A shady deal from the beginning without vetting process and only qatar was contacted directly...Surely Saif-ur-Rehman did well for himself and NZ.

2) Qatar can cancel the agreement any time after serving a 90-day notice.

3) The deal will become ineffective in case of a war that lasts 30 days.

4) The agreement was executed by Prince nawaz Bin Sharif directly and forced PSO to sing the agreement with Qatar gas to avoid state to state agreement and made it Spot-purchase agreement with commitment for 15 years. MD SNGPL resign after he was forced to sign the agreement.

5)India in 2015 strike a deal with Exxon Mobil-owned Gorgon LNG plant in Australia that will cost them 8.2$/MMBtu

6)Korea is importing @8.77$/MMbtu, Jappan @8.77, India @8.2, China @8.62, Spain @6.76, Brazil @8..

Don't know which side NZ was representing..

it is 13.37% of crude oil price, that is around $7 per MMbtu at current price.
 
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NYMEX is a domestic gas rate, LNG is expensive commodity..........

Err did you even get the gist of what I was saying ?

NYMEX is open platform. It's not domestic price. Most places use the nymex data to close future gas deals !

Well on a second thought, prices seem to be a bit on the higher side in Asia and South America but overall, pakistan ain't paying extra. Check the data below !

@waz

Screen Shot 2017-02-05 at 10.19.45 PM.png
 
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Please dont distort things. The contract is 13.37% of Brent, the price is not $13.37/MMBTU. Price is lot less. Some of the lower prices quoted here have been entered into when oil prices were lower and outlook was gloomier. Stop abusing MNS for no rhyme or reason.

Even if i accept that what you are saying is correct then 2.16% higher price for 35 million tonnes would cost us billions of dollars in loss and what about competitive bidding that had to be done for that contract which wasn't even done and straight away awarded to the qataris for 15 years not even 1,3 or 5 years?Should we not suspect him for using the government to build his own assets via his qatari front-man who's a declared business partner of Corrupt Shareef.
 
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Err did you even get the gist of what I was saying ?

NYMEX is open platform. It's not domestic price. Most places use the nymex data to close future gas deals !

Well on a second thought, prices seem to be a bit on the higher side in Asia and South America but overall, pakistan ain't paying extra. Check the data below !

@waz

View attachment 374788

DEFINITION of 'Henry Hub' A natural gas pipeline located in Erath, Louisiana that serves as the official delivery location for futures contracts on the NYMEX. The Henry Hub is owned by Sabine Pipe Line LLC and has access to many of the major gas markets in the United States.
Hence a domestic price for gas in USA.

Pakistan is paying around $8 per MMbtu, it is comparable to india, so it is not on the higher side
 
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Even if i accept that what you are saying is correct then 2.16% higher price for 35 million tonnes would cost us billions of dollars in loss and what about competitive bidding that had to be done for that contract which wasn't even done and straight away awarded to the qataris?Should we not suspect him for using the government to build his own assets via his qatari front-men who's a declared business partner of Panama Shareef.

Actually more than competitive bidding, what would have been prudent was to diversify the suppliers. Keep Qatar and maybe import gas from Bahrain or Russia as well !
 
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  • Qatar Gas’ initial offer was $6.56 per mmbtu which was brought down by govt after negotiations
  • Qatar Gas to pay $320,000 per LNG shipment while PSO would bear remaining $430,000 in port charges to Port Qasim Authority


Prime Minister Nawaz Sharif is set to ink a strategic long-term deal with Qatar for import of Liquefied Natural Gas (LNG) at an attractive price of $5.35 per mmbtu as compared to $6.56 per mmbtu which was agreed in year 2013, Pakistan Today has learnt.

Import of the Qatari LNG is likely to commence from March this year to December 2031.

An official document available with Pakistan Today reveals that Qatar Gas has asked the Pakistan State Oil (PSO) to provide standby letter of credit (SBLC) at 105 per cent of the value of four LNG cargoes during the first year and bear more than half of the port charges per shipment.

According to the document, Qatar Gas would pay the Port Qasim Authority’s port charges of $750,000 per shipment while it has asked that PSO pay the rest of $430,000 per shipment.

The Oil and Gas Regulatory Authority (OGRA) is yet to give its decision on the review petition filed by PSO against the provisional LNG price notified on October 7, 2015.

The long term LNG sales purchase agreement (SPA) is based on supplies under ‘take or pay’ arrangement. Under the payment terms, PSO would have to make payment 15 days after completion of unloading of the LNG. However, the PSO would have to produce a SBLC to Qatar Gas.

Under the deal, PSO has to provide Qatar Gas SBLC(s) at 105 per cent of the value of 4 LNG cargoes during first year which will be increased to the value of 6 LNG cargoes from the second year.

The SPA contract would be governed by the English Law. The agreement is expected to be signed in Doha, Qatar during the prime minister’s visit after necessary approval from PSO’s Board of Management.

According to documents, Qatar Gas has agreed to sign the SPA at per LNG cargo price of 13.37 per cent of Brent. The Brent value would be the average of three preceding months. Pakistan plans to import 2.25 million tonnes of LNG during 2016 and first quarter of 2017. From the second quarter of 2017 onwards to 2031, the country will import 3.75 million tonnes per annum.

“The price review can take place once after the 10th anniversary of the start date and if it fails, either party may terminate the SPA with effect from the end of the contract year in which the termination notice was served in which case the supply period can be as short as 11 years,” says the document.

The Long Term LNG SPA also provides for annual upward and downward flexibilities of up to 3 LNG cargoes per contract year. Downward flexibility can be accumulated for 2 contract years according to the document.

The document says that the procurement price from Qatar was the lowest compared to the prices it offered at various points in the past. The LNG price for the Mashal Project was $6.94 per mmbtu, Integrated Project $6.01 per mmbtu, while Qatar’s initial offer was $6.56 per mmbtu, which was brought down after negotiations.

The gas will also be cheaper compared with Iran Pakistan Pipeline (IP) and Turkmenistan-Afghanistan-Pakistan-India pipeline project. The IP border rate is $5.70 per mmbtu, while TAPI border Rate is $5.90 per mmbtu, while Qatar’s current rate is $5.35 per mmbtu. However, with the high transportation cost and the harsh strings attached with the deal, the gas will cost significantly more than gas through a pipeline. But the pipeline infrastructure is a ways off from being built.

Pakistan is currently facing a severe shortage of natural gas, both for its electricity generation and industrial use. The supply-demand gap is approximately 2 bcfd. The government is, therefore, pursuing the import of LNG to minimise the gap.

ECC in July 2013 authorised the Petroleum Ministry to negotiate with Qatar Gas on government-to-government basis for import of up to 500 mmcfd of LNG on DES basis. Subsequently the Petroleum Ministry nominated PSO and Qatar nominated Qatar Gas to negotiate the SPA.

The ECC, in August 2014, constituted LNG Price Negotiation Committee (PNC) comprising Petroleum secretary (Chairman), representatives of Finance Division, Water and Power and BOI. Managing Directors SNGPL, SSGCL, PSO and ISGSL (committee secretary) were made part of the committee.

The PNC held a series of meetings with Qatar Gas and finalised the price and key commercial terms of the SPA. The PNC report along with salient features of the Qatar Gas SPA were presented to the ECC in its meeting held on January 13 wherein the ECC considered and accorded in principle approval to the recommendations made by PNC and also allowed PSO as the buyer to execute the SPA with Qatar Gas as the seller pursuant to the agreement.



http://www.pakistantoday.com.pk/2016/02/09/govt-to-seal-qatari-lng-deal-at-5-per-mmbtu/
 
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DEFINITION of 'Henry Hub' A natural gas pipeline located in Erath, Louisiana that serves as the official delivery location for futures contracts on the NYMEX. The Henry Hub is owned by Sabine Pipe Line LLC and has access to many of the major gas markets in the United States.
Hence a domestic price for gas in USA.

Pakistan is paying around $8 per MMbtu, it is comparable to india, so it is not on the higher side

Yeah that's what I have pointed out in the second post ! 13.37% of brent crude ie ~ 7.8 MMBtu ain't that expensive !

I agree that the person above has quoted wrong price ... but you are also not quoting it correct ... here the comparison is not usd price vs usd ... but comparison is quotation of eni vs qatar ... if news is correct then obviously eni rate is cheaper ... differnece of 1% in the rate means qatar is almost 9% more expensive ...

So bashing NS is right here ...

Also, the gas deals are generally offered off a fixed port. E.g. The ENI I am pretty sure would have been giving the gas off the Mediterranean coast while qatari gas would be offered right across the persian gulf !

So the difference in gas quotes should be taken in perspective of practical details (like cost of insurance + transportation cost etc) rather than do just witch hunting !
 
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Actually more than competitive bidding, what would have been prudent was to diversify the suppliers. Keep Qatar and maybe import gas from Bahrain or Russia as well !
Yeah it would have been done if Corrupt shareef didn't had any business interests with the qatari price.

  • Qatar Gas’ initial offer was $6.56 per mmbtu which was brought down by govt after negotiations
  • Qatar Gas to pay $320,000 per LNG shipment while PSO would bear remaining $430,000 in port charges to Port Qasim Authority

Prime Minister Nawaz Sharif is set to ink a strategic long-term deal with Qatar for import of Liquefied Natural Gas (LNG) at an attractive price of $5.35 per mmbtu as compared to $6.56 per mmbtu which was agreed in year 2013, Pakistan Today has learnt.
All of this is just an eyewash for public consumption when even a competitive bidding isn't done and contract is awarded for 15 years to his business partners not even 1,3 or 5 years.
 
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Price of 2 Qatari letters probably :hitwall::hitwall::hitwall:

Expensive LNG: Pakistan to pay additional USD 2.5 billion to Qatar
Last Updated On 04 February,2017 10:53 am
373607_69901007.jpg

National exchequer would bear said burden as price of LNG offered by Qatar is relatively higher.
ISLAMABAD (Daily Dunya) - Ministry of Petroleum will pay an additional amount of Rs250 billion to Qatar on import of Liquefied natural gas (LNG).

Price for each cargo was agreed at 13.37 per cent of Brent whereas Italy’s ENI had offered price of each cargo at 11.62 per cent of Brent thus resulting in huge difference of 2.16 per cent, revealed persons related to business of LNG.

National exchequer would bear said burden as price of LNG offered by Qatar is relatively higher when compared with price being offered by other international companies.

Analysts believe that end of Iran’s isolation would slash price of LNG by half as international community is lifting sanctions from Khamenei’s state. Furthermore, Japan and South Korea are again operating nuclear power plants and this phenomenon is bringing LNG’s price down in international market.

Another representative of international company told Dunya News that ministry of petroleum should had issued tenders of three to five years instead of fifteen years.

Last year, Pakistan and Qatar had inked agreement in Doha according to which later would provide thirty-five million tonnes of LNG gas to earlier during period of fifteen years.

Source:

http://dunyanews.tv/en/Business/373607-Expensive-LNG-Pakistan-to-pay-additional-USD-25-

http://eurasiadiary.com/en/news/eco...tan-to-pay-additional-usd-25-billion-to-qatar


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@Mrc
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All of this because, Pakistan doan't know how to write contracts or some one in bureaucracy is getting rich.
Responsible should be penalized and arrested.
Unfortunately biggest concern of this nation is Qatari falcons.

Why are we buying such expensive LNG compared to other countries
:hitwall::hitwall:
Compared to which country's offer?

Because the PM of the country is awarding contract for LPG to himself via a front-man commonly known as the "QATARI PRINCE" for next 15 years
PM is PM becuase of corrupt election commission and foreign controlled judiciary.

Cost of horse is on top of that
I think, propaganda cost was far more than cost of horse.
Everyone knows Pakistan is buying Qatri gas but not from Qatar... there are middlemen.
Where as credit of creating shortage of gas in country, goes to Asi Ali Zardari.
 
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today let me give u guys a news.
nawas got a 40 milion pound mansion in london from qataris
 
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